03 April 2014: Nifty Elliott wave analysis: Is Nifty preparing for 6800 levels too? May be yes. It is nearly 14% rise so far now. As long as it is above 6720, it can move higher only. Reduce trading activity now.

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

For 03 April 2014: -

On 02 April 2014, FII Bought INR 594.67 crs and DII Sold INR 471.78 crs

You draw any resistance and it will break. That fact is that uncharted territory has no practical resistance on higher side. It can be only gravity which can bring market down by its own but that also takes longer time to act. Right now investor’s apatite is huge. Constant buying continues like there is no tomorrow to buy.

Nifty closed for 10^th day in positive in a row. This is almost half a month that Nifty has never closed even in red. This is a dangerous situation. This kind of winning streak always has ugly end. Every long position must be protected with suitable stop loss and traders should avoid overnight position.

For today’s trading Nifty will have a threshold support at 6720. If it breaks 6720, then only it can have chance of hitting levels like 6675. As long as it above, there cannot be any meaningful pullback. It means that as long as it is above 6720 it can rapidly recover to hit another newer high.

Now come to most important question. Where is resistance? Where is the level which can give fall from high? It is tougher task to predict. Some numeral and series study suggest that top can be either at 6767 or may come at 6804. Clearly, do not short the top. I suggest shorting the weakness which can come only below 6720 levels. It is just not making sense on trading Nifty anymore.

Well, why to think weakness in index? You can get better trading opportunity in stocks. It is easier job to do. Do not touch index on either side. Pick long trades on euphoric stronger stocks. This market is equally throwing weaker stocks for short for bears too. We did shorting on ITC in few days. You can add cement stocks in your watch list for today.

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Strategy for Nifty April future – Traditionally, it will open stronger by few odd points. It does not matter how higher it comes. It is important that it is giving new all-time high every day. It is not my choice to trade on Nifty future. It is not easy to deal a market which moved by 800 points or nearly 14% in just few weeks. I am not saying that fall will come but even if it comes by 300 points then also it will be only a technical correction. Remember, one-third price fall is known as technical correction only. This is a dangerous situation. It is a mid-cap stock like gain on NIFTY.

S&P 500 (USA) – It got another record high last night. It has intraday high at 1893 + levels. So far, technical set up is for good run above 1900 levels. One may feel that stock prices are running on unidirectional mode from past more than year but this is truth. I can still say that as long as it is above 1840 it has just one direction and that direction is ‘up’. It will surely face resistance at some higher point but that point has not came on chart yet. It is looking like to cross 1900 marks by Friday night. It is a cautious levels but run continues.