30 April 2014: Nifty Elliott wave analysis: Trading support may emerge at 6700-6650 levels after three days of consecutive drop on Nifty. Today’s trading will be decisive before 16th May 2014.

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 287.98 crs and DII Sold INR 550.89 crs

We saw three day drop in a row in Indian market. This is a normal and expected profit taking before election result. I still believe that ‘optimism’ will come to buy this market from any lower levels. This level can be at 6700 or 6650 or anything levels, that remains different question.

If we are in real bull market then today should be litmus test for bulls. We may have a chance for rise on forth session after three days of fall. Nifty has closed below 20 DMA after more than two months. This will keep stock price under pressure but recovery is designed to come. Retrenchment suggests that Nifty either may recovery from 6700 or from 6650 for once.

We have trading holiday tomorrow. This means that weekly bottom will come today or max by Friday. I suggest that one should avoid shorting this market on lower side. We cannot say that election optimism will end any sooner.  

For today’s trading, 6700-6650 will offer good trading support. We can expect a trading bounce from lower levels. Let us see how it comes or will this come or not.

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Strategy for Nifty May future – SGX Nifty is hinting for a higher start by 20 points right now. Technical charts are suggesting that as long as 6740 holds, this market can bounce. Better strength is expected only above 6820 levels. Suppose, if it crosses above 6820 then one can expect a quick fire move towards 6900+ levels but those may come next week. If it comes this week then it will surprise me. Still, it is not a good idea to short near 6740 without decisive break.  

S&P 500 (USA) – As expected, it is hitting 1880 levels. As long as it is staying above 50 DMA i.e. 1858, we can say that market is in bull’s hand. I feel that cross above 1885 will again generate the possibility of 1900+ levels. So far, nothing is bad for bulls. We can hope rise and more rises. Scope is not there for any shorting activity. We may see a top sooner and a sell off will also hit in May month but so far, it looks like we may have some more rise. We can trade long but be cautious at higher levels and do not forget to add short.