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.