05 May 2014: Nifty Elliott wave analysis: We still have valid support at 6650 levels and resistance at 6750. Market need to break any of these levels to establish a trading direction.

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

For 05 May 2014: -

On 02 May 2014, FII Bought INR 386.95 crs and DII Sold INR 405.65 crs

How was past week? It was all red governed by bears with few odd brutal intraday bounce. Market is just in the range of 6700 to 6800 zone from past five weeks. What was looking like a rally has turned to a consolidation?

I have already mentioned 6650 as a most crucial support and we saw some attempts by bulls in that range. Why to get support at 6650? Suppose, if it breaks 6650 then it is going to change a bull’s pattern which is called higher low. 16^th May is on next Friday when we will get outcome of general election 2014.

I am strongly quoting that Indian market will be de-coupled from global cues for this week and next week too. From past trading sessions, bears have played with a dip on caution and profit taking. My view is that now bulls may play with optimism. Remember, gap generally used to come with primary trend. If market has to go higher post-election then a primary bullish trend has to establish before that.

If a primary bullish pattern establish then it will be first hint for positive outcome of election. In past week itself, I have divided first half of May series trend in to 7-7 trading sessions. So far, it goes as per map. We saw first 7 trading sessions in profit booking mode. Surely, I need to watch for 2-3 more trading sessions. Then, we may see optimism in market.

For today’s trading session, we may see some higher opening and a roller coaster ride. I will prefer to buy dip. Technical support will be at 6660-6650 levels. On higher side, rise will sustain if it manages to spend time above 6740-6750.

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Strategy for Nifty May future – SGX Nifty is hinting for a higher start near 6750. I still prefer to buy dip as optimism may hit before election result and try to generate a new primary bullish trend. I am still advising caution at higher levels for intraday as caution and profit taking will try to bring it lower. For today and tomorrow, the fight between caution and optimism will continue.

S&P 500 (USA) – S&P hit a high at 1891 on Friday and slipped to close in red. This may be nervousness near resistance zone. Now, here are some strong words. S&P 500 may hit a new all-time high and few euphoric closes. I was expecting 1950 as a top. It does not matter if it hit 1930 or 1950 this week. What is going to be next will be more important? A brutal correction may come afterward. So far, I shall prefer to be bullish for this week. I may be bearish from either next week or from my target range of 1930-1950. Remember, we still may have upside of 40-50 odd points.