22 April 2014: Nifty Elliott wave analysis: It may again knock for new all-time high. Derivative expiry may play key roles now. Technical support = 6780. Participate less using index now.

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

For 22 April 2014: -

On 21 April 2014, FII Bought INR 212.85 crs and DII Sold INR 217.66 crs

I was expecting Nifty to come near to 6820 and we got this. I was already planned not buying at 6820. Even today, I will not opt to buy at 6820 unless it really stands well above 6820 with conviction. I am not saying that it is giving signal to short but it is to avoid right now.

VIX is at scary levels and volume is diminishing. FIIs are also not participating well from past few days. Remember, expiry for April series will be only tomorrow as we have holiday on Thursday due to parliamentary election. So far, we saw short squeeze rally and now it may be turn for those who are having long. Future course of action will largely depend on roll over to May series. Many traders might opt to forward their long.

Conclusion for the day is that we can see support emerging in the area of 6800-6780 itself. As long as it holds above 6780 we may see pressure on short position. This may drive another rally. I can think shorting below 6780 or at some extreme high point in search of top.

I can clearly say, avoid index trading if it remains choppy. One needs to search trading opportunity in stocks.

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Strategy for Nifty April future – So far, it is running above 6825 levels which might be a good thing. As long as it is above 6825 we may have a chance to see levels of 6880. Some quick moves might come today. In spite of trading signals, I prefer to avoid trading in index. I am concerns with volume factor. I am expecting some quicker intraday move at some point but direction can be equally wild. Let us see what is coming. If you are trading then time has come to switch to May series now.

S&P 500 (USA) – It came on dot at 1872 but not crossed yet. This is going to be a challenging level. Now I have some clarity. This bounce came from 1815 and it may have a possible top at 1872. If it fails to cross above 1872 then we have a good chance to see lower levels near 1850. One may opt to short here with smaller possible stop loss as risk – reward ratio will be great. Cross over of 1872 may generate a possibility for the test of 1885 and then 1900. I feel that 1872 may be a point to fail.