28 April 2014: Nifty Elliott wave analysis: Expect trading support at 6732-6722 levels. Just for this week, this market may be sell-on-rise market. Trend may not change even after any big sell off.

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

For 28 April 2014: -

On 25 April 2014, FII Bought INR 295.01 crs and DII Sold INR 417.30 crs

Nifty opened with a high point on May series with new all-time high on Friday which came as 6869.85 but failed to give any impressive close. It has closed below 6800 to make chart weaker. I can apply ‘Sell in May and go home’ for rest other market but can I say same for Indian market? This month series has crucial date as 16^th May. Market participants will take positions based on their expectations on the outcome of general election.

Most general pattern suggests that pre-election rally used to continue in post-election weeks too. It is true for 4 out of last five elections. In this way, I strongly suggest that we can expect market following this behavior this time too. It gives me a sense that market can come to 20 DMA at 6732-6722 as maximum possible downside levels. Any break below 6722 will give us another levels near 6660 levels.

‘Optimism’ will definitely buy the low of this market. So, do not conclude for reversal in trend till 16^th May. I can sense for weakness in trend for this week but this may not continue for long. Including today we have 14 trading session till 16^th May. I suggest splitting this 14 days period in to two equal half. We may see correction or consolidation or silence in first 7 trading days to throw weak bulls. After that, bulls will take positions based on their ‘Optimism’ which will be bullish and may be sharply bullish. So start the count from today but do not be in hurry to conclude for top and do not even try to buy bottom sooner. Buy low only next week.

For today’s trading, 6722 will offer good trading support. It is odd 60 points away. So, we still have scope to see dip. Remember, this dip is coming for just one purpose. The purpose is to throw weak bulls. I have already suggested shorting this market at higher levels with a possible trading top at 6878. It was explain on Friday how it comes.

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Strategy for Nifty May future – We may see a soft opening for today’s session. Crucial support will be at 6780 and 6765 levels. I feel that these levels may be tested sooner now. Take a note that we will see some wild fluctuation in premium value of Nifty May month future for this week. Target and stop loss will be adjusted based on spot value. I like to see if Nifty spot breaks 6722 on lower side or will it recover before that.

S&P 500 (USA) – I talked about two figures on Friday. First was 1885 and another was 1872. Market saved my stop loss point of 1885 and given me desired break down below my threshold point of 1872. Charts are suggesting for next logical target at 1850. I believe for the break below 1850 too and we will see it moving towards 1800 sooner. I can see warning sign in NASDAQ composite too. It is suggesting me to prepare for tech melt down after earning season. Currently, it is at 4070. I see a high possibility for crash target as 3700 to 3600. Stay short and enjoy the week. Market is close to confirm for ‘Sell in May and go home’. Take a note that crucial 50 DMA is now at 1858.