31 March 2014: Nifty Elliott wave analysis: Another new all-time high will come today. NIFTY is likely to come in the range of 6725 to 6750 levels. All eyes are on upcoming RBI policy now. Expect intraday profit taking.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 31 March 2014: -

On 28 March 2014, FII Bought INR 1362.87 crs and DII Sold INR 208.34 crs

It has added 200 points more in the last week of trades and it has not given any sign of pullback yet. All eyes are going for upcoming RBI policy. Indian rupee come at the levels of 60 against USD and it came after many months.  

Global market is also running on good mood on Monday morning. So it is looking very obvious to see another new all-time high in Indian market today also. Banking stocks has added further gain with strong momentum which can continue before RBI policy. FII has picked banking stocks very aggressively.

Banking stocks has given a better participation in recent run up. Problem comes as most traders were shy on banking stocks after July-August 2013 fall. On other hand VIX hit 19 levels also. It is heavily over bought and fear index VIX is at alarming levels. Last time when VIX was at 19, Nifty was eve below 6100 levels. I cannot find correlation between NIFTY and VIX anymore. How can one say that people are buying stocks with fear?  

“Will this market ever fall?” Market will fall on the day when least number of people would expect about it. I strongly suggest that it is better to left out from this kind of rally than to participate. Stay away from any fresh investment. Minimum 300 points dip on Nifty will come in the name of ‘technical correction’ which can easily eat bulls’ money. It is coming now or today? This is not a compulsion. This correction will come once top get defined. So far, market is hunting higher to make a ‘tempting top’. Today is 13^th trading session after hitting 6432. Remember, what bull market build in a month can be taken out just in a week if bear market comes.

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Strategy for Nifty April future – SGX NIFTY is showing that it can open near 6770 levels. It is too fast and too furious. It is reminding me the days of December 2007 where Index was running on euphoric mode. I need to be clear that it does not make sense to short for intraday when market is positive. So as long as it holds 6730-6740 then just sit on sideline. Can you buy at 6770? This is also not making sense. I will prefer to trade beyond indices. First sign of top will come when mid cap and small cap indices shows negative close.

S&P 500 (USA) – The swing of 1840 to 1880 continues. It is in same range for fifth week in a row. Equally today is the last trading day of this financial year. Technical study remains same. As long as it is above 1840 it is making sense to expect rise. Confusion comes as it has consolidated for too long period. I can say that an outcome makes meaning to trade either above 1884 or below 1840 levels. When will I come? I have no idea. Let us see when will it come and which direction it choose. 

28 March 2014: Nifty Elliott wave analysis: We are getting newer all-time after each few days. Next technical resistance may emerge near 6700 only. Momentum remains intact as long as it is above 6580.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 28 March 2014: -

On 27 March 2014, FII Bought INR 2191.93 crs and DII Sold INR 591.83 crs

We got another newer life time high on derivative expiry day. There was some contribution from short covering too which was very obvious. It was said that as long as it holds 6550, we can expect this rise to continue. I am revising this threshold as it is highly over-stretched. Now, new threshold is at 6580. It is also a bit far from 6640.

When global market was higher Indian market was down last year. Now, when global markets are turning soft Indian market is hitting newer high every day. It makes jitter to understand money flow which is a key behind this rally since 5933 on Nifty. It is 700 points straight rally on Nifty so far.

Banking stocks has given a better participation in recent run up. Problem comes as most traders were shy on banking stocks after July-August 2013 fall. On other hand we are getting newer high when VIX is above 18. It hits 18.725 yesterday which are beyond any great logic. In normal conditions, VIX should run below 15 for a bullish market which is hitting new all-time high.

“Will this market ever fall?” Market will fall on the day when least number of people would expect about it. I strongly suggest that it is better to left out from this kind of rally than to participate. Stay away from any fresh investment. Minimum 300 points dip on Nifty will come in the name of ‘technical correction’ which can easily eat bulls’ money. It is coming now or today? This is not a compulsion. This correction will come once top get defined. So far, market is hunting higher to make a ‘tempting top’.

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Strategy for Nifty April future – We should see an optimistic opening. Technical resistance will emerge above 6720. It is looking like to open near 6720. Cross above will make fewer attempts towards 6750 also which will be tougher to trade. Technical support will be in the zone of 6660 to 6650. It will not make easy top as of now. Time consolidation does not mean for price correction. If market turns choppy near higher levels or positive then it may be tempting for long but avoid such odd moves.

S&P 500 (USA) – It came on just testing distance for 1840 but missed. Well, now bitter truth is that it is coming near 1840 too many times. A support which has tested too many times has higher chance for breaking. Once it breaks 1840 then we will a window opening for almost 100 points slide. Even minimum target will come near 1800 area. Challenging aspect remains a live as long as it is above 1840. So, let us see today. I am anticipating this break to come today. Do not focus on reasons.  

27 March 2014: Nifty Elliott wave analysis: We have derivative expiry today. Valid resistance is at 6628. Momentum continues as long as it holds 6550. If global cues dominate then we will see a lower close on expiry day.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 27 March 2014: -

On 26 March 2014, FII Bought INR 1004.52 crs and DII Sold INR 356.11 crs

We are finally on derivative expiry day. This series will remember for a new all-time high. Practically, there is no price correction in this series although we saw some time correction in the mid of series. We have no previous data which can give us idea about how series should expiry. What it looks is that it will be wild and volatile.

I feel that market has reached to its most expect target of 6625. I still cannot say that we have signal as threat but it is highly stretched market. Normally, people should try to take their profit and this can drag the price. Is it really going to happen? This is something which is beyond the scope of speculation.

I am repeating which I said yesterday. As long as Nifty is above 6550, it should favour bulls. This is well 50 points below the current Nifty value. Resistance will be at 6628. It means that Nifty has a wild range to swing. VIX is crossing 18 again.

“Will this market ever fall?” Market will fall on the day when least number of people would expect about it. 

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Strategy for Nifty March future – Opening is likely to be flat. If global cues dominate then we can see levels on down side. A possible small short trade may emerge if it breaks 6585. Although, support may emerge at 6560 level. Decisive break below 6560 will make some sell signal.  Technical resistance will be in the range of 6640 to 6650.

S&P 500 (USA) – So, this swing continues and S&P came near to 1850 again. For better price confirmation we should wait for the break of 1840 as break down. Something is happening in US market which is giving edge to bear to enter in the market. Perhaps 61^st month of rally will not be easy. I always suggest focusing on first follow up day which is today. So, if it breaks 1840 today then we may have big opening for bears.  What I like to say is this – “If it breaks and sustain below 1840 then we have a chance to see a slide towards 1740”. 

26 March 2014: Nifty Elliott wave analysis: We are just a day away from derivative expiry. This momentum continues as long as 6550 hold for intraday. Expect profit taking from higher levels. Where are those higher levels?

You must read previous articles and watch the given chart carefully to understand this article completely.

For 26 March 2014: -

On 24 March 2014, FII Bought INR 1465.62 crs and DII Sold INR 770.39 crs

On Tuesday, European Central Bank officials said that they had not ruled out providing further stimulus to support the euro zone as it slowly recovers from the debt crisis. Is it the beginning of new phase of euphoria?

We have derivative expiry of March month series tomorrow. There is no sign of any pullback in this rally so far. Psychologically, it can attract some short covering rise to satisfy charting target of 6625 levels. I must say that conviction is less for this rise to sustain. It is pre-poll rally. Market moved on expectation of stable government. Well, my view is different from market. We are not going to see any stable mandate in general election 2014.

For today’s session again we will see higher opening and then long choppy hours to run. This will make trading difficult. On higher side, profit taking should come but shorting should be done only after technical signals. Crossover of 6625 may attract short covering rise to intensify.

“Will this market ever fall?” Market will fall on the day when least number of people would expect about it. 

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Strategy for Nifty March future – Opening looks like to come near 6630 levels and immediate trading resistance and target may come at 6650-6660 levels. It is hard to expect more. We are just a day before expiry and prefer to stay away from trades as it can trap you in any direction. We are well far away from levels where we can expect any kind of panic sell off. Technical support stands at 6600, and then at 6570.

S&P 500 (USA) – This is another irritating zone. S&P remains choppy in the range of 1884 to 1850. It hit 1850 a day before yesterday and all set to move towards 1884. This zone is not reflecting trend yet. Although, choppy moves near all-high should be treated as bullish. This rally is innocent unless proven guilty. So far, technical support is at 1850. As long as it holds 1850, scope for 1884 is always open. Crossover can give us as big as 1900 + levels. When I am saying 1900 + then I may mean for something like 1940-1950. 

25 March 2014: Nifty Elliott wave analysis: We are just two days away from derivative expiry. This momentum continues as long as 6550 hold for intraday. Expect profit taking from higher levels.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 25 March 2014: -

On 24 March 2014, FII Bought INR 1465.62 crs and DII Sold INR 770.39 crs

Technical analysis says that rally should be innocent until proven guilty. So far, this rally is still innocent.

So diamond pattern goes in favour of bulls. It is just shy near 6600 levels. FII buying and election optimism continues. It is important to note that banking stocks has dominated the trend.

As it has closed in an uncharted territory so theoretically there is no resistance. Direction of all crucial moving is up as of now. Global cues are not very supportive now. DAX lost more than 1.50% yesterday. NIKKEI is near to next breakdown which can push it below 14000 marks by this week. Well, it has yet to give sell signal.

20 DMA is at 6417, which is nearest support. This is suggesting that market goes on over stretched mode. We are just two days away from derivative expiry of March month series. I still feel that upcoming two days may invite some profit taking. Indian rupee is almost at 8 month’s low right now against USD. This is key driver of recent days rally.

For today’s session, do not expect significant weakness as long as it stays above 6550 levels. Initial reactions should be avoided for trading.

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Strategy for Nifty March future – Flip flow breaks higher and it goes above 6600 levels. As long as it is above 6570, we cannot expect anything negative. It may open little lower due to global cues but technical charts are still stronger. Equally, I will not prefer to buy this rise. Below 6570 we may see some profit taking. It is better to switch actions on April month series now.    

S&P 500 (USA) – It hit 1850 again yesterday. 50 days moving average came at 1832 now which is logical support. If it breaks 1850 then it can invite the test of 50 DMA. More than that, 50 DMA is now flattening out. Will swing continue in the range of 1884 to 1850? It may be but now I am not giving biasing to anyone. My feeling is that time has come. This is 60^th month of rally in USA. One obvious reaction may come and test 50 DMA. If this has to happen then today is best day to do so. Technical resistance is at 1867 for the day. above which it can again try for 1884.  

24 March 2014: Nifty Elliott wave analysis: Decisive support is at 6480 on closing basis. We are close to 150 points of sharp move but direction is still unknown. It must break this range by early this week.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 24 March 2014: -

On 22 March 2014, FII Bought INR 14.79 crs and DII Sold INR 8.42 crs

Technical analysis says that rally should be innocent until proven guilty. So far, this rally is still innocent.

Now we are in derivative expiry week for March month contract. Nifty has hardly done anything in past week except saving 6480-6470 support levels. It same near to this range almost every single day. this week is going to be crucial as I feel that we will see ‘storm after recent choppy moves’.

It has almost formed a diamond shape on daily chart. This conclude that we are either going to see a sharp up side of 150 points or a sharp sell off 150 points. I am taking extreme ends. One end is at 6575 and other end is at 6430.

Technical indicators like MACD are also giving sign of tiredness at these levels. I have plotted 10 days moving average on the given chart. This is a ‘short term moving average’. As Nifty is near to 10 DMA so we need to focus on price action for decision mode. It is showing that it can break 6480 sooner this week itself.

For today’s session, expect opening near 6510-6520 and then long choppy hours before another sell off in late hours. A billion dollar question is, “When will it close below 6480?”

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Strategy for Nifty March future – Flip flow continues. We can expect this choppy run to expand little more for today also. There are signs that it will break 6490 sooner but timing is still clueless. We should leave this on time itself. Whenever this happens, we can expect big fall. Till that time Nifty is not going to give us trades.

S&P 500 (USA) – I said that I feel that it is going to take few more swing in the range of 1850 to 1884. We saw a new all-time high near 1884 on Friday but it gave up almost 20 points from day’s high. As long as it holds levels of 1840-1830, we can hope for this kind of swing to continue. I cannot deny the possibility of further rally but only if it crosses and close above 1884 successfully. There is nothing that I can name as sign of warning except one. That one face is that this rally is now 60 months older. 

21 March 2014: Nifty Elliott wave analysis: It maybe another useless first half. Decisive support is at 6480 on closing basis. We are close to 150 points of sharp move but direction is still unknown.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 21 March 2014: -

On 20 March 2014, FII Bought INR 722.02 crs and DII Sold INR 563.29 crs

Now we can experience an expiry heat all over. Nifty has broken 6480 yesterday but still it has manages to close just above this level. Take a note that NIFTY’s yesterday low was exactly at 9 days exponential moving average.

It has almost formed a diamond shape on daily chart. This conclude that we are either going to see a sharp up side of 150 points or a sharp sell off 150 points. I am taking extreme ends. One end is at 6575 and other end is at 6430.

Yesterday’s last hour trades were suggesting for lower break. Technical indicators like MACD are also giving sign of tiredness at these levels. Well, as of this morning we saw rebound on US market. This may lead us towards some higher opening. Even if it comes 20 points then also it will throw us on indecisive ranges.

For today’s session, expect opening near 6510 and then long choppy hours before another sell off in late hours. A billion dollar question is, “When will it close below 6480?”

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Strategy for Nifty March future – No global indices has given this kind of choppy pattern after making a new all-time high. Take a note. Do not opt to trade intraday except last hours. Choppy days can give you both buy and sell signals in quicker intervals. I will just prefer to trade in last 60 minutes or if it can break yesterday’s low of 6489.

S&P 500 (USA) – It has respected 1850 support against all odds. It is just 12-13 points away from its all-time high. It is looking more bullish than bearish. As long as it holds 1850, it can try to break 1884 on higher side. Then, it can finally take a move towards 1900 levels. Still, I feel that it is going to take few more swing in the range of 1850 to 1884. We may feel reservations on charts as many momentum indicators are missing those fresh signs of strength.  Give a bias to bulls this time. 

20 March 2014: Nifty Elliott wave analysis: A gap down coming after fed statement. If it breaks 6480 then we may see violent reaction. Resistance zone = 6565-6575. Focus on possible diamond formation at top.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 20 March 2014: -

On 19 March 2014, FII Bought INR 1069.74 crs and DII Sold INR 610.96 crs

Outcome of fed minutes was not very encouraging. They gave further 10 billion cut in bond buying program which is in line with market expectation. What disappointed the market was that fed chairperson said about the possibility of rate hike next year.

We are close to the end of low interest era in USA and this is a bad news for emerging countries. A technical chart of Nifty has also shaped in an odd way. It has traded narrow and giving a hint of wild swing before expiry. It could be on either side but we are getting reasons to see that swing on negative side.

We have reasons but it needs to come in an actual term. So, question remains same. Will we get the break below 6480? We have a possibility of event based ‘bear gap down’. If today’s gap (no matter even if it comes smaller) fails to fill then it may turn violent in coming days. Nifty is almost forming a diamond top formation which generally ends with sharp impulse up or down. If it breaks 6480 then we will see a likely down side impulse which can potentially bring Nifty towards 6300 in quicker time.

On higher side 6565 to 6575 will be decisive hurdle..

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Strategy for Nifty March future – Opening is going to be negative due to overnight development. In the down side, it will have support at 6520-6510 levels. If it breaks 6510 then only we can think about decisive profit taking to hit. Let us see if it takes out 6510 in the process of gap down. Keep your eye on India VIX. It can see some decisive move on higher side.

S&P 500 (USA) – So finally, Yellen said something which market does not like. She speaks out about the possibility of rate hike in spring 2015. This makes the market nervous and S&P tested the support of 1850 before last minutes bounce. There can be two technical aspects. One is one can add long with stop loss just below 1850 or one can wait for the break of 1850 to short. I prefer the later one. Wait for the break below 1850 and then add shorts. It may test 50 DMA which is at 1828. This is last and final support. 

19 March 2014: Nifty Elliott wave analysis: Expect 6565-6575 as still trading resistance, crossover can give 6600-6625. Unless it closes below 6480, we cannot get decisive profit taking. Caution coming from VIX too.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 19 March 2014: -

On 18 March 2014, FII Bought INR 1011.95 crs and DII Sold INR 201.97 crs

Higher levels are still offering resistance on NIFTY. Closing was 60 points off the high and 20 points off the low. It is important to note that closing came below the opening quotes. All this came, even after massive buying by FIIs. Technical charts are still showing sluggish move for the days to come.

India VIX was high by 4% again yesterday. It is showing a pattern which suggests that it is shaping for sharp rise in coming days which can cause for price fall on blue chip indices. I am still considering 6480 as decisive support. We can get some decisive profit taking only if it manages to close below 6480 for two days in a row.  

Above condition still looks tougher but market tend to satisfy few times in recent days. Momentum indicators, like MACD is showing for tiredness on chart. Will this tiredness convert to profit taking? In order to say that also we need trades below 6480. Many aspects are giving 6480 as decisive support. So, we need to wait for the break below 6480 to conclude for further course of action.

On higher side 6565 to 6575 will be decisive hurdle. Although charts are still suggesting that 6625 may also be within reach if it manages to sustain well above 6565-6575 ranges.

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Strategy for Nifty March future – Opening is going to be stable and positive. It may be near to 6575 levels as hinted by SGX Nifty. We will see immediate resistance coming above 6600 levels. I am again expecting day like yesterday where it can open higher, move higher than profit taking to hit at higher zone. In the down side, it will have support at 6520-6510 levels. If it breaks 6510 then only we can think about decisive profit taking to hit. Keep your eye on India VIX. It can see some decisive move on higher side.

S&P 500 (USA) – S&P 500 continues with bounce and coming closer to previous all-time high again. It is just 10-12 points away. It is showing power of bulls. It is on another striking distance. As long as it is above 1854, bulls will control the market. First achievable target can be at 1883-1884. Crossover can generate target above 1900. Charts are giving obvious caution with negative divergence on MACD.  US indices has violated many divergence in past but one such final divergence will work on one day. Which one can be the last? It is still beyond the scope of speculation.

18 March 2014: Nifty Elliott wave analysis: Expect 6565 as still trading resistance, crossover can give 6600-6625. So far, technical charts are still safer with decisive support at 6400-6415 levels.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 18 March 2014: -

On 14 March 2014, FII Bought INR 982.19 crs and DII Sold INR 866.42 crs

A bounce came on Friday from 6432 which was still higher than 6420. It has closed above 6500 levels again. So, it was second weekly close above 6500 levels in a row. There is no great technical threat as long as it stays above 6400-6420 support zones. Take a note that 50 DMA for NIFTY is running at 6216 levels which is way too far from here.

We may see trading near this range but scope of fall will always there to go near to 50 DMA. Nifty and Sensex has history of running near 50 DMA only. I feel that 6265 will offer good resistance on higher side. Above which, it can try to come near 6620-6625 levels but high will not be stable one. Some key momentum indicators are tiring now.

I say, have a look at 6480 for the day. If it breaks 6480 then it will invite some unwinding of longs. On higher side, you can expect intermediate trading resistance at 6535 and 6565 levels. Banking index will be weaker than Nifty or may have lesser strength than blue chip index. Stock specific movements are expected.

NIKKEI is trading at 14480 right now. I will not surprise if it close in negative. It can break 14000 levels this week or next week and then we will see a real melt down. Note that below 14000, NIKKEI will become first index which can signal of something ‘very bad’. Read S&P 500 (US) analysis too, to conclude, how time is shaping for global indices.

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Strategy for Nifty March future – Opening is going to be stable to positive. It may open even above 6550 but scope for further trading rise is going to be very limited. Technical charts are suggesting that above 6262 it can hit levels of 6600 levels or nearer. Expect some weakness if it can settle below 6520 levels. Picture will be clearer only in second half of trading. Keep your eye on India VIX too.

S&P 500 (USA) – S&P 500 bounced in its own fashion from a nearer support of 1828 which was 50 Days moving average. It closed above 1854 again and that raised a possible new all-time high again. When I am saying all-time high, have a look on MACD. Will it able to surpass with divergence again? March is 60^th month of this Bull Run which has started from March 2009. It has happened in 1982 to 1987 also but it ended with brutal sell off. So, if it is so close to make a history then it is better to wait for 61th month. I have not said this from past few months as I was also bullish time to time. I am repeating that ‘mother trend’ has been violated due to fed interference. So far, daily chart has no threat for long but be cautious.

14 March 2014: Nifty Elliott wave analysis: Nifty will take out 6480 in gap down. Now, focus on follow up selling to conclude for intermediate down trend. If it continues then Nifty can come as low as 6250.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 14 March 2014: -

On 13 March 2014, FII Bought INR 616.62 crs and DII Sold INR 314.40 crs

Yesterday, it has invited selling in last 50 minutes of trades. I have anticipated for this selling to come. Now, we need to see if follow up of selling will come or not. Fortunately, global market goes in big red last night and today morning. US, EU and whole Asian indices go for fall. There is no point to talk about the reason of fall as those can put technical on back seat.

From past two days I said for brutal fall on NIKKEI. From 15150 it came at 14430 now in just two trading days. I can say that reasons are coming just to satisfy chart formation. Alter way, market might have sensed those reasons earlier. So, will those make cumulative impact on Indian market? There is no direct link between Indian markets with Ukraine crisis but surely Chinese concerns are related with us. Money out flow may be concern.

Technical charts are suggesting that once Nifty settles below 6480 then we can expect levels of 6420-6400. I am looking for follow up of this selling. If this happens then Nifty can see levels of 6250 also in early next week.

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Strategy for Nifty March future – Opening is definitely going to go lower. SGX Nifty is giving opening near 6480 but I am afraid it can be even worse. Most likely support for March month future is at 6450-6440 levels. I cannot suggest shorting on gap down as it is against the basic principle of trading. It will be better to use pullback to short for intraday. It may be the beginning of intermediate down trend which can intensify on follow up selling.

S&P 500 (USA) – It got the wanted part and we got close below 1850 levels. This is showing lack of conviction on frequent all-time high now. I have already said that DJIA is showing clarity which has suggested that 16600 will not cross. If we get follow up of this fall today then we will see brutal sell off now. First day was yesterday to break up trend and today it will give signal of follow up. As long as it is below 1854, there is no point to think about buying.

13 March 2014: Nifty Elliott wave analysis: Nifty saved 6480 thrice in past three days. We may see sell off from high either by today or max by tomorrow. Distribution may result fall from high.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 13 March 2014: -

On 12 March 2014, FII Bought INR 864.35 crs and DII Sold INR 821.97 crs

January month IIP data came at 0.10% and February month CPI came at 8.10%. All these data are almost better than market estimate. There is nothing in this data that can make us worry and not even the reasons for cheers. Clearly, I can say that on the basis of this data I am not expecting any rate cut. A euphoric market may expect on the base on optimism.

In past three trading sessions it came near to 6480 but saved every time. This is a decisive support. We cannot see trend in intraday trading as long as it hold above 6480. It can just able to make bounce from near to 6480 which it has done many times in past three days.

We saw stock and sector specific weakness in between. If we saw buying in banking stocks then equally we saw selling in metal stocks. Even at all-time high we fail to see momentum in each sector. It is true that rate sensitive stocks has seen good rise in past few days but that can tired sooner now.

India VIX is still running above 17 if not crossing 18. This kind of VIX is itself not justifying Nifty levels. I can quote that if VIX crosses 18 anytime then we can see some reasons for sharp sell-off. It can come sooner or later.

So study remains same, range for the day should be 6565 to 6480. Will we get decisive move? NIKKEI is trading at 15895. I expect that closing will go in deep down in red. Very likely target is also falling in the range of 15200-15000 levels.

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Strategy for Nifty March future – We may get flat opening. It is saving 6510 levels from past three days and hence 6510 will become support. On higher side 6595 is acting as resistance. It is distributing at higher end but not giving any sign of meaningful pullback yet. It may not come unless it settles below 6510. I still believe that this market should fall from higher levels. We may be very close to a short to medium term top. Let us see what comes today.

S&P 500 (USA) – It was quoted yesterday that if it does not break 1850 then also it will come close to 1850. We saw a low at 1854 and then a bounce. How long can this continue? As long as it is above 1850 on closing basis we can hope for few more fresh life time’s high. I have a feeling that S&P will swing in the range of 1884 to 1850 in few more days. Do not try to find trend in this range as it can irritate you. Logically, 1884 is a resistance but crossover can give levels above 1900 too. Is S&P preparing for 2000 too? We have better answer on DJIA chart which is showing that16600 may not pass so easily and fall will hit before that only.

12 March 2014: Nifty Elliott wave analysis: Distribution pattern is emerging near top and rally will see the end sooner. Expect good pullback if it breaks 6480.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 12 March 2014: -

On 11 March 2014, FII Bought INR 1471.23 crs and DII Sold INR 1331.73 crs

It was a waste day yesterday on Nifty. I have quoted from past two days that 6560 to 6600 will be a tougher resistance. It has formed two tops in two days which comes at 6562. It is confirming that 6560+ levels has good value as resistance and it deserve respect now.

Index was almost making worse moves for trading while stocks are still giving trades which are clearer. Like, yesterday we opted short on Tata Steel. It may be the time to search stock specific trades. As long as Nifty holds 6480, we can see odd sudden rise in Nifty. Can I say that we can see pullback today? I feel that time has come. It can break 6480 any day and any time.

I still suggest waiting for trades to settle below 6480 then only we can see a hope for a move towards 6420 levels. India is not the market which is successfully generating euphoria of all-time high. It is more looking like a bulls’ trap. Indian ADR were down on an average 1% in US market last night.  

So for the day, range can be 6565 to 6480 before anything decisive. Keep close on VIX also. If it moved above 18 then panic must come. NIFTY is at all-time high and VIX is running at 17.50+. It is itself showing lack of confidence in the market. a market which went up on lack of majority confidence, are bound to come lower.

Two days back, I said for a ‘massive sell off’ coming for Nikkei when it was at add 15150 levels. I can see ‘breakdown’ pattern right now in morning hours. I would not surprise if this close with loss of 500-600 points by today itself.

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Strategy for Nifty March future – I am feeling for a gap down today and it can be bear gap down. If it can successfully overlap the gap down then it can be another waste day for Nifty. If it breaks 6520-6510 levels then it can open huge scope of pullback. Break below 6510 can give us levels like 6450-6420. Sooner or later, it should come.

S&P 500 (USA) – It was very near to its all-time high again on last night but slipped. It closed nearly 16 points away from crucial 1884 levels. Charts are saying to have a hope as long as 1850 holds. Equally, some momentum indicators are giving sign of tiredness. So, will it break 1850? If not then also at least it will go near to test 1850. In past few days, I refused to buy even after strong buy signals. When small cap rally, then it might be a hint for ‘top formation’. It looks like this theory may work this time too. 

11 March 2014: Nifty Elliott wave analysis: Consolidation may continue near top. Resistance is at 6560-6600 and support is at 6480 levels. A possible pullback may be very close as hinted from VIX.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 11 March 2014: -

On 10 March 2014, FII Bought INR 1253.65 crs and DII Sold INR 1044.82 crs

Once Nifty hit new all-time high it has not given any sign of pullback yet. For yesterday I have quoted for resistance at 6560-6600 which found to be interesting. It must be the fundamental which should push the rally higher but we have not seen many changes there. Since the low of 6216 we have not seen even single negative closing. It is heavily over bought now.

We saw good buying in heavyweight like SBIN, Reliance and many other PSU banks too. There are few strong reasons to see this breakout and rally with some doubt. Have a look at fear index VIX. From the low of 12.50 it has shoot up and now it is at 17.77, almost near to 18. Yesterday also, it was high by 6.30%. In normal market condition, it should be trending lower.

Above fact suggests that higher number of market participants is under panic even after new all-time high and that panic is rising with rise in stock market. Can stock price go higher in panic? Basic of technical analysis suggests that that rally can be short seller driven. Remember, we are not talking about market like US which has greater money support. In India, it is only FII which are buying right now.

In clear words, if VIX crosses 18 then I definitely cannot see the possibility and scope of further rise. Still, it is the price only which pay to traders and that it still higher. If I am concluding something using VIX then also I have to accept that trend once established cannot be easily violated. Nifty can still try to move higher (resistance 6560-6600) with support at 6490-6480. If it breaks 6480 on downside then we can think about substantial pullback. Till then, trade less.

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Strategy for Nifty March future – Where is the scope of pullback? It is not giving room yet to play for pullback even after 350 points of sharp rise. I suggest waiting for something decisive to happen for intraday traders. On other hand positional traders can slowly load shorts at these rise. Intraday at these can be difficult and dicey. If market trades in positive zone, then avoid deals. Yesterday’s high of 6595 will act as still resistance.

S&P 500 (USA) – It has opened lower and hit 1867 yesterday but finally closed at the highest point of the day at 1877. I still feel that as long as it is above 1850 we cannot do much on optimism rise. This may be the zone of consolidation. Outcome of this consolidation is still beyond the scope of prediction. Most of trading activities has shifted to small cap stocks which generally happen near peak of the rally. It is the tempted money phase of current rally. I suggest be on sideline until some momentum comes for trading. 

10 March 2014: Nifty Elliott wave analysis: First day after a new life-time high. Pullback can get support at 6490 and 6420. Top will not be safe and selling will begin in the second half of week. Till then, it will invite bulls.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 10 March 2014: -

On 07 March 2014, FII Bought INR 2577.44 crs and DII Sold INR 669.58 crs

A new all-time hit came on Nifty and Sensex. Once it has crossed it kept moving higher. Nifty gave a high at 6537.80. It seems that we are in pre – election rally. It may be a different question if it is good to buy or not. Charts has developed two another important supports, one is at 6420 and other at 6360 levels. This cannot be ignored now.  

I was excepting some target on the cross of 6420 but those came in just few hours. It moved like there will be no tomorrow. FIIs have bought on very heavily on Friday. This generally comes near top. Still, I am not in hurry to conclude for top. Basic of technical analysis suggests that a trend once established has higher chance to continue. So, if follow up buying comes then pullback may not be big. We should get many answers this week.  

Indian ADRs were not very strong on Friday night at US market. I am definitely not going to buy these high in India market. Every stock is not stronger or higher. It is just giving opportunity to trade stock specific run up.

What can we call a possible top? Well, if a gap down comes and does not fill then it can be first hint of possible short term top. I am still saying short term top only as Nifty may try to move higher after pull back as of now. As long as it is above 6420-6360, it is likely to move but right now it is heavily over bought.

My charts are saying that we can see brutal sell off on Nikkei and it may grind lower. I can see a possible dip of 500 points or more in short term.

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Strategy for Nifty March future – It should give some gap down after moving 300 points in three days. It is making it heavily over bought now. If it fails to cross above 6565 then expect a pullback towards 6490-6450 levels. It may be process of days. Higher levels may be just euphoria for Indian market. If it is pre-election rally then it is coming much quicker and earlier. SGX Nifty is hinting for opening near 6510, this gives me a sense of possible bear’s gap down. Is it so easy after hitting a convincing new life time high? Let us see.

S&P 500 (USA) – It has another life time high at 1883.57. So far, high comes in the zone of 188X. It has moved well above previous resistance of 1850 and it makes me to believe that as long as it is above 1850 we cannot get easy correction. Charts are suggesting that as long as it holds 1850 it can move higher but at some time it has to stop. At some point it has to go against bulls. I prefer to be on side line as I fear for a brutal top. Pictures are clearer on DJIA. Will it surpass 16600 levels so easily? Take a note that small cap rally always comes in the last leg of rally and US market is going through same phase.