29 April 2014: Nifty Elliott wave analysis: 20 DMA support came at 6740 now. If it sustain below 6740 then it will test lower levels. Trend may not change even after any big sell off. Key short term support – 6650-6630!!!

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

For 29 April 2014: -

On 28 April 2014, FII Bought INR 77.02 crs and DII Sold INR 370.53 crs

Nifty has not done much yesterday but it is still coming very near to 20 DMA support slowly. As of now 20 DMA comes at 6740 levels and Nifty closed at 6760. So, it is just 20 odd points. How important is this? Just take a note that Nifty has never traded below 20 DMA since 18^th February 2014. I never say buy or sell based on moving average crossover. It just indicates indecision. This is important.  Market behavior changes from a clear uptrend to indecision.  

Question is what makes me clearer. If you look at momentum technical indicators then you can see a conclusion about losing momentum. Money flow is also confirming such behavior. I will focus on follow up trades and 20 DMA right now.

I am still repeating that ‘optimism’ will come to buy some levels. 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 28 May 2014 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, 6740-6730 will offer good trading support. If it starts trading below 6740 with conviction then we can expect test of 6700 to 6650 by this week itself. On higher side bulls will impress only if it can stay above 6780-6790.

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Strategy for Nifty May future – It has two important supports, one is at 6790 and another at 6765. Low volume in choppy market offer some blow up in trades which we saw yesterday with sudden rise and fall. Right now, I suggest shorting it if it starts trading below 6790. Expect target near 6765 levels. It will have stiff resistance at 6850 levels.  

S&P 500 (USA) – S&P hit a low at 1851 yesterday but closed at 1869 with last hour run. It has 50 DMA at 1858 which was broken once with conviction but later on won by bulls. So, is it a bullish reversal? Yes, we cannot deny the possibility. Yesterday’s trading range was nearly 27 points so it may be a hint that we may see levels near 1900 again. Still, it is a possibility not a trade so far. Right now, charts are respecting previous supports more than moving average. I will not short this market any more right now unless it either come near 1900 or go below 1850. I am not saying that fall will not come. I am saying that bulls have bought time before fall now. Well, they can save for 2-3 trading sessions more.