12 May 2014: Nifty Elliott wave analysis: A mammoth rise came on Friday to push bears back. We have good chance to see a new all-time again on Nifty. Will you hold long just before exit poll which will come today at 5 pm?

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

For 12 May 2014: -

On 09 May 2014, FII Bought INR 1278.68 crs and DII Sold INR 75.30 crs

Finally, after 50% retrenchment we saw a rebound which comes with stronger than expected intensity. I nearly gained over 200 points but I still prefer to hold. I have already explained last week that near to poll result date we will see ‘a rally of optimism’. What has happened on Friday was a part of it. Cross above 6880 on Nifty will drive it higher and higher. Do not try to be extra brave to short.

I have quoted 254 for BJP on Friday and I have explained in my weekend article with complete details. If I am right then NDA will surely come with comfortable majority. This can push market higher towards 7000 marks. Today’s trading session will also go with optimism. Technical charts are suggesting that Nifty can hit in the zone of 6950 to 7000 marks if it stay above 6880.

It does not matter if this happens today or tomorrow but scope is surely open. Best thing that market can do now is that it will move above 6880 and force each short to cover in panic. If this happens then rally could be larger and quicker. Rally based on ‘Optimism’ should continue until either it see end of optimism or after desired final result on event.

Technical charts are still suggesting for crucial support at 6830 to 6800 levels. On higher side, it needs to sustain above 6880 to register further gain which can be very impressive. If it breaks 6800 on lower side then I will be worried a little. So far, it looks like it will break 6880 on higher side and try to come in the striking range of 7000 levels.

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Strategy for Nifty May future – SGX Nifty is showing for positive start even after massive gain on Friday. Positive momentum is expected to continue. I hope that it will cross another crucial threshold which is at 6925. Cross over of 6925 will add 50-75 points on higher side before exit poll hit this evening. In worse case, it will be cautiously silent before event but such chance is less to happen. Even if this happens then also it will give up partly from higher levels only.

S&P 500 (USA) – Even on Friday I have quoted for the support at 50 DMA. We saw intraday low exactly at 1867 which was in striking distance from 50 DMA which is at 1865. We saw good rebound in second half, this drive a fact that bulls are still trying. Now, all-time high is at 1899 and 50 DMA is at 1865. Difference is just 2% now. It is showing the time based consolidation. Before turning weak we may have some steam left for bulls. It may try to break on higher side before going lower. My conviction is turning less for new all-time high now. Break below 50 DMA will invite bears to hit for “May month sell off”.