10 April 2014: Nifty Elliott wave analysis: Another life time high and another hope of momentum. Focus on mid cap and small cap stocks for trades. As long as 6700 holds Nifty will try to go in the zone of 6950-7000 levels. Words of caution must go stronger !!!

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

For 10 April 2014: -

On 09 April 2014, FII Bought INR 1043.86 crs and DII Sold INR 463.78 crs

It gave another shoot up to test even 6800+ levels on Nifty. It was very expected after a bull’s gap up. Any market which is touching life time high and staying near to that is bullish sign. I am dealing long side but definitely thrilled. It is not meaningful to talk about any target. Remember that it is not easy to stand against odds. Indian market has entered in a phase where it can opt for rapid moves.

VIX is near to 27 and there may be so many divergences. This is highly overbought market. All facts are true but first priority goes to price. It is only the price which pays to a trade. This price pattern of stocks is up. I feel that lot of shorts might have added in the anticipation of correction in past one week. I was also one such. I exited my shorts in the morning hour and added long and may be too many longs. Idea was simple, cover your short before others do and then opt long to take advantage for short covering.

It does not mean that market is comfortable. In fact it is going to be more complex now. In pure charting term, Nifty can stretch towards 6910-7000 levels as long as it is staying above 6700. I am taking this this market in a step wise manner as I know that this market will punish the bulls when they will least expect about it.

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Strategy for Nifty April future – I still ignore trades on Nifty future. If I have to be bullish then I must pick a index which has better intensity so I picked Bank Nifty yesterday to play long. It gave good range to trade yesterday. For today’s trading you can expect soft opening. It is a buy as long as it holds 6800 levels. If it breaks 6800 then one must avoid long. Trade long if it spends time above 6850. I still suggest that pick strong stocks rather than trading index. Take this as a reference. I cannot give any importance of positive news flow. It used to come after every rally. I must say that above 6850 Nifty future can go as big as 6900 plus levels.

S&P 500 (USA) – I was expecting this bounce near 1860-1870 zone and we got this. US market remains most disciplined one for technicians. We got closing at 1872. I can still say that there may be little more bounce from here too. It forces me to say that 1884 may again come in to play. It is going to be interesting to see tonight. Question is will it give up from higher levels tonight. Remember, last night it has closed at highest point of day after a real sound closing. I always say to focus on the second day of recovery to conclude about follow up trades. Technical support is only ay 1840.