16 May 2014: Nifty Elliott wave analysis: Decision day of Indian economy finally came. Keep your figure crosses and pray for result as we expected. If this happens in market favour then we may have another massive up leg. Do not make technical levels.

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

For 16 May 2014: -

On 15 May 2014, FII Bought INR 934.94 crs and DII Sold INR 385.40 crs

My first sentence to light hearted trader is – ‘Why don’t you take a holiday today?’ Have few cups of coffee and snacks and then just watch television. 

We have done a lot in past 400 points of rally. So, here is big ‘decision day’ which we are waiting from past many months. Finally calendar showing for 16^th may 2014.

We have done enough with opinion poll, exit poll and many calculations. Market grows higher levels based on optimism over a point. That point is, ‘India is going to get a stable and decision making government headed by a strong Mr. Narendra Modi’ who will pull us from policy paralysis’. This one sentence will play major role for rest of this year.

Exit poll - Can it go wrong like 2004 and 2009?

Probably not. Based on sample collection, the difference between vote shares of UPA vs NDA is wider than 10%. I am inducing all survey agencies.

In the year 2004, I think, it was 35% for NDA and 34% for UPA. So, even small shift could have given push to the projection. This time almost all survey agencies are giving a hint that NDA vote shares may be bigger than 45% and it has a distance of 10% from closest rival. So, number seats will not differ much.

 I still stand with my point that –

• ·         BJP will end tally at 254 at least and NDA can come above 286 seats.
• ·         Congress will limit at 66 seats while UPA end its show with lesser than 100 seats.
• ·        Third largest party will be trinamool congress while Delhi show stopper AAP will disappoint people with nominal 3-5 seats.

There is nothing to apply technical today. I bought few Nifty options yesterday with my calculated risk. I gave us rest of my stock futures and Nifty future to protect my capital. I choose 7400 Nifty call to play. I still believe that poll result cannot go much beyond projections. If anything goes for surprises then it will be only positive surprises. If anything goes wrong then it will reflect on Monday.

I am just repeating old Fibonacci levels. This is fifth wave extension. This generally comes with extremely rapid pace. Have a look, if we compare this to third wave. 100% @ 7325, 127.20% @ 7569, 161.80% 7878. Please refer to the chart.

For today’s trading, we have support at 7080 and 7050. On higher side, we have meaningful resistance at 7175 and then only at 7200 levels. Trading may turn wild today. As said a sentence when Nifty was near 6700 that Gaps and surprises used to come in the direction of primary trend. If primary trend is up then gap will up. Right now, primary trend is up so gap should be up.

Let us take alter view too. What will say that rally got broken? A simple 5% dip from top will say that rally got broken. No more mathematics.

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Strategy for Nifty May future – I bought 7400 Nifty call option after I gained over 450 point on my past holding on Nifty future. I am not going to deal today at any cost. I just need to control my temptation. I still hope that I am right on my view with poll analysis. Read on my home if you missed. After poll result we may have a possibility of 7800-8000 Nifty to visit. When will I short this market? Sooner, very sooner. Just wait patiently. Right now I am saying that possibility of 6-8-10% rise more. After than we have bright chance of hitting 10% fall from top. So do not jump to buy on rise. I will just cut few of my delivery holding on rise.

S&P 500 (USA) – Nothing could be more perfect than this. I gave the target of 1865-1860 and it hit a low near 1860 before closing little higher from low. This is confirming that May month sell off. I hope that you would not be a trap bull who bought 1900+ top. So, what is next? Now if it breaks 1860 and manages few closes then we can hope for 1810-1800 as next stop for S&P. Consensus dip may be deeper if comes. Use every pullback to just short this index.