09 May 2014: Nifty Elliott wave analysis: Bull market has no reason to retrench more than 50% to 61.80%. If it violate then it will be tougher to see any rally on or after poll result day. 6599-6580 must save and bounce.

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

For 09 May 2014: -

On 08 May 2014, FII Bought INR 363.24 crs and DII Sold INR 119.90 crs

Yesterday was also a dead day with favour towards bears only. Let me explain the chart as I have given. Firstly, I am considering that rise from 6432 to 6869 was a part of bulls run which secular trend. In fact, this was most defined Bull Run after breakout. So, if trend wants to advance then it should not retrench by more than 50% or 61.80%. The defined zone comes from 6650 to 6599 levels.

What is the market message now? I need to say that now market is waiting for Monday evening when ‘Exit poll’ outcome hit. Wave theory is giving support in the zone of 6650 to 6599 and we are getting an event set up now.

So, it may be another dead day. There is no reason for the end of optimism on political outcome. Only question is, “Will NDA get enough seats to form a stable government?” With small doubt, I need to say that yes, NDA may be more than magic figure of 272. My speculation gives me 240 to 254 seats to BJP only. Although, it will beyond the scope of this article to comment more than that.

Technical charts are still suggesting for crucial support at 6650 to 6640 levels. On higher side, it needs to sustain above 6740 to 6750 to register further gain which is way far now. In the downside, break below 6640 will give us levels like 6599-6580.

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Strategy for Nifty May future – SGX Nifty is showing weakness but opening will be better than what it shows. It can take positive to flat opening somewhere near to 6690 levels. Yesterday’s high point of 6720 will be crucial point now. Crossover of 6720 will generate something better. If not then break below 6655 will bring Nifty future near to 6620 also. Note that premium value has shrink by just 20 points.

S&P 500 (USA) – On Monday I have quoted that this week will be crucial and if it has to make a new all-time high it must come by this week. We saw a high at 1889 yesterday and then a sharp reversal. What is market message now? Very clearly, if it breaks 50 DMA then it will begin its most awaited ‘May sell off’. This mode may turn out to be very brutal for market. So, for today, support stand at 1864 to 1860. Today is last trading day of the week so some decisive moves may come.