16 April 2014: Nifty Elliott wave analysis: Support – 6700, Break will give us levels of 6640. On higher side resistance will be at 6775-6800. A pullback before election result may be possible.

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

For 16 April 2014: -

On 15 April 2014, FII Sold INR 21.63 crs and DII Sold INR 278.27 crs

Last night Wall Street rebounded strongly from lower levels. On other hand Indian market looks tired now. FIIs have sold for second day in a row. I do not give much value to those but it is still in consideration. My point is that Indian market has decoupled itself from global movement. So, we may not have any good impact of US rebound. Indian market will react with its own data, earning and political development.

India VIX hit 32.62 as high yesterday. Technical charts are suggesting that as long as NIFTY is below 6775 we have a chance of heading towards 6700 levels. Short term and meaningful support will be only at 6640 which were almost on test on 7^th April 2014. This uptrend will intact as long as it is above 6640. This does not mean that one can buy here. Note that after a long time we saw under performance in mid cap and small cap indices. Even Bank Nifty has added weakness which was strong point of recent rally.

Conclusion for the day is that Nifty will face technical resistance at 6775 and 6800 levels. In the down side, It will get support at 6700. Break of 6700 will invite move towards 6640. Short on weakness will be better strategy for trading. Pick the stock which is trading with weakness. Like, we picked Tata Motors yesterday.

TCS, WIPRO and Reliance will deliver their quarterly numbers this week. After Infosys, I am not expecting any positive surprises with any of these stocks.

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Strategy for Nifty April future – Trading index was not my choice from past many trading sessions. Now, it seems that we may have some better opportunity. It will face trading resistance at 6770-6780. Opening is likely to be on lower side. If it breaks 6730 then we will see quick move towards 6710-6700 levels. I like to short the rise. We may have a chance to buy near 6700 depending on technical indicators for intraday. We will get a confirmation about tired in Nifty by today itself. If not then prepare for another round of buying which can hit in few days. I feel that we will get some sell off before further rise.

S&P 500 (USA) – I was expecting a bounce coming near to 1840. What has surprised me is that it took swing again from support of 1815. This kind of pattern generally creates momentum for some more bounce. More importantly it has closed above 1842. We have a chance to say that 1815 is a short term bottom. When I am saying short term bottom then I mean for 3-4 days of cycle. There is no point to stay short above 1840 levels of S&P 500. I need to repeat that it is expected bounce so far. We can count on strength only if it manages to close above 50 DMA and this level is at 1846.75.