23 April 2014: Nifty Elliott wave analysis: We have derivative expiry for April month series. Key support will be at 6800-6780. Race for more new all-time high will continue as long as it holds 6800-6780.

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

For 23 April 2014: -

On 22 April 2014, FII Bought INR 162.93 crs and DII Sold INR 298.46 crs

I was expecting this kind of dead day near top. It was completely useless to trade in index. We have derivative expiry for this month of trade and tomorrow is a trading holiday. This combination will make trading move interesting. There is no sign of pullback yet. If pullback comes then it will based on derivative expiry only.

Based on technical chart, expiry will favour bulls as long as it holds 6800 levels. If not too big then also, Nifty may try to come near to 6850 levels as long as it holds 6800 levels. Choppy trading sessions are bringing sell threshold closer and higher.

Conclusion for the day is that we can see support emerging in the area of 6800-6780 itself. As long as it holds above 6800 we may see pressure on short position. This may drive another rally. I can think shorting below 6800. Any higher levels are not looking good to short.

I can clearly say, avoid index trading if it remains choppy. One needs to search trading opportunity in stocks. We may see some good activities in mid cap and small cap stocks. It may not be necessarily good for bulls. Some stocks might favour bears on expiry day.  

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Strategy for Nifty May future – It is trading with heavy premium of 65-70 points. Above 6900 it will try to add 25-30 points more on higher side. Key support will be at 6865-6860. To be on safer side, one can think to trade in short direction if and only if it breaks 6860 levels. It may be complex to trade today but trading opportunity must be there. Range of 6900 to 6860 may be smaller to say for expiry day. So, we have good chance of breaking on either side.

S&P 500 (USA) – It was said yesterday that Crossover of 1872 may generate a possibility for the test of 1885 and then 1900. We got top almost at 1885 and then a slip in second half. 70% chances is that we got the top of this cycle by yesterday itself and we should see a moderate to big red day today. First job for S&P is to close below 1872 and then only we can able to conclude for further course of action for trade. I say, add short and hold short. We are heading towards ‘sell in May and go away’.