07 April 2014: Nifty Elliott wave analysis: Weak global cues may dominate but charts are not turning weak yet. It has two strong supports; one is at 6675 and next is at 6640 levels. It has resistance at 6775 only.

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

For 07 April 2014: -

On 04 April 2014, FII Bought INR 232.46 crs and DII Sold INR 1125.06 crs

On Friday, Indian rupee turned stronger by further half percent. On other hand US market got their brutal sell off. We heard that Sun Pharma is going to buy Ranbaxy in four billion dollar. So over all, we have many good news for Indian market but all news are bad for rest of the world. It happens very rare.

Let us back to technical chart formation. I have already suggested for two important technical supports for NIFTY. One is at 6675 which was already saved on Friday. Next and most crucial support will be at 6640. I hope that Nifty will break 6675 today and a move may begin for 6640. Now the reaction at 6640 will be decisive. If it breaks then we can conclude for some good technical dip and a short term topping in market. Remember, this rally has a length of nearly 845 points. So, even 300 points of dip from 6776.75, i.e. 6480 will be only a technical correction.

So, this was the reason not to buy at high even if market were going higher. How dangerous is this? Look at another moving average, i.e. 200 DMA. It is at 6060 levels. Nifty is still near its high point only. Some desperate correction is needed. This uptrend will remains intact with short term support at 6480-6420 levels.

How ridiculous is this that we have all-time high with VIX running above 22 and now even heading towards 23. I feel that nifty can face stiff resistance at 6775 + Levels. Even after all odd, NIFTY is still in the race for bulls only. Let us see if it can break 6675 and head towards 6640 or not.

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Strategy for Nifty April future – SGX Nifty is indicating for dead opening. I am also expecting same. Strong technical support for NIFTY April month future is at 6710-6700 levels. I still suggest that Indices are not a trade yet in Indian market. It is heavily overbought and it has not given up yet. Stock specific trades make meaning. If it have to trade then I will act on short only if it breaks 6700 levels. weak global sentiment may hurt Indian market anytime. Will it?

S&P 500 (USA) – S&P 500 got a shocking dip after hitting 1899 levels. I have already quoted that 13 Tom Demark indicators were giving ‘sell’. Is the chart going concerning? I suggest giving a full test to bears. It has two important supports, one is at 1865 and final is at 1840. Once it breaks 1840 then I would be sure for a move towards 200 DMA. We will see lot of clarity this week. Note that we can be confident on weakness only is it goes below 1840 or 50 DMA. After all, it’s a question of strongest bull of the world. They will try their bet to save 1840.