03 March 2014: Nifty Elliott wave analysis: Ukraine crisis can cause panic sell off. So far, Asia is down by 1-2%. Technical support for Nifty is only at 6183-6170. Be cautious as this sell can intensify!!!

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For 03 March 2014: -

On 28 February 2014, FII Bought INR 591.82 crs and DII Sold INR 12.02 crs

Weekend development is very shaky. Ukraine and Russia goes close to war. Why suddenly it is so important? Ukraine is also a breadbasket, a natural gas chokepoint, and a nation of 45 million people in a pivotal spot north of the Black Sea. Ukraine matters—to Russia, Europe, the U.S., and even China.

As of now impact is like, Dow Future has lost over 150 points and Nikkei is down by 370 points. Sell off across the board and almost hitting every single global market. There is no escape. In few days I said that the next leg of selloff is close and it will be global in nature. I was definitely not guessing that this is going to happen in this way. All of sudden, world is on the verge of war.

I have shorts in term of long in put options over the weekend. I suggest small investors and trader to maintain distance from the market for few days. This can be much worse than what it looks like. Right now we will see panic sell off then we will see technical sell off and then a bad bear cycle can begin. Do not touch this market and especially if it turn to a falling knife. Do not try to pay the price of political stupidity. I cannot give any support and resistance as those has lesser meaning. From my experience I can say that in panic mode, only moving average support works. So, 50 DMA is at 6183, 100 DMA is at 6170 and 200 DMA is at 5987. It is likely to get some support at 6183 to 6170 zone.

If panic continues with war converting to reality then be prepare to see 6000 levels by this week.

If NATO force involve then prepare to see as odd as 5800-5700 Nifty. One can only hope, it will be news based market movement. Technical has lesser importance now.

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Strategy for Nifty March future – There is no point to say that look on SGX Nifty or any other global cues. Situation is changing minute by minute. Market will open will gap down. Magnitude of gap down will depends on the news flow from Ukraine just before opening. Impact can be bigger or smaller but those will be justified by market react only. I feel 2% fall is very likely.

S&P 500 (USA) – Just when S&P 500 hit new life time high at 1868, news broke on Ukraine and it spoiled bull’s party. Now support if it breaks 1840 by any reason then 75% chance is that 1868 will be top for some time now. What is there is guess now? Let us look at today’s closing. If it close below 1840 then prepare to see 1800-1780 levels by this week only.

Regards,             

Praveen Kumar