09 April 2014: Nifty Elliott wave analysis: Indian market may take a gap up even after big sell-off in global Indices. VIX is at 25 +. Avoid buying at higher levels till Friday. As long as it holds 6640, top cannot be confirmed.

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

For 09 April 2014: -

On 07 April 2014, FII Bought INR 703.71 crs and DII Sold INR 1081.36 crs

There were times in past also when Indian market has decoupled itself from global moves. It has done this time too but in another direction. Last year when all indices were breaking all-time high, Indian market has refused. This time, election fever holds the key and Sensex and Nifty refused to show any big impact of global sell off yet.

I must be clear that US market may be one the verge of 10% dip. We may have two out of three chances for this to happen. Question is that can Indian market able to resist so much? It is not about US indices only. I have quoted few week back about NIKKEI too that if it breaks 14000 then it will be clearly bearish. Sooner or later, it is going to break 14000 marks.

It is definitely not easy to say for buy when VIX is at 25 plus levels. So far, price charts have totally different story and it is ignoring all negative news. If any market ignores negative news then it must be named as bullish market. Indian market is showing all bullish characteristic in perhaps very wrong time. I find it just reverse of last year’s move when it was showing all bearish characteristic in bullish global scenario.

Nifty is likely to take gap up today as suggested by SGX Nifty this morning. If it opens near 6750 then nothing will be left to buy. I need to repeat word of caution. Market may react at higher levels. It may not able to ignore bigger dips global indices. Equally, 6640 is real good support which was saved on Monday’s trading and hence rebound came. Once again, two supports may work; one is 6675 and other at 6640 levels. I still suggest that what SGX Nifty is pointing is a view and position taken by traders at abroad. It is not a compulsion that Indian market will follow same trend. It looks like money has moved towards emerging market and Indian equity got good attention. One must prepare for earning season.

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Strategy for Nifty April future – SGX Nifty is indicating for opening near 6790 which is going to be a sound gap up after one day of holiday. Note that if really comes then it will be perhaps against the strongest odd of recent times. There cannot be strategy for this kind of day. It is better to ignore trading on index. Remember, VIX is also above 25. Fact so far is that we only have time correction so far, there is no price correction yet. It is all indicating for something bigger in coming days. Do not short either unless sell signal comes during trading hours.

S&P 500 (USA) – S&P 500 has tested 1840 support zone last night but closed with some bounce. This is going to be weak-bear bounce. It will end in the zone of 1860-1870 at the maximum side. A fresh wave of sell off can hit the street again which can bring S&P below 1840 levels. This time it is going to sustain below 1840. Then, we have chance to see market going lower towards 200 DMA or may be near to 1740 area. Bulls may say let it close below 1840. So, this is last chance. Do not break your head on reason.