20 May 2014: Nifty Elliott wave analysis: Consolidate likely to continue. Technical resistance will be at 7325 and support in the range of 7130 to 7080. Do not jump at higher levels. It may be dull day after higher opening.

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For 20 May 2014: -

On 19 May 2014, FII Bought INR 1350.04 crs and DII Sold INR 348.48 crs

Event day low is always important if it forced market to move in wild range of 5-6% or more. So, the low of 16^th May 2014 will act as good trading support. This low point is 7130. I still believe that as long as 7130 holds it will continue to intact higher and the race for new all-time high is still on.

There is a strong possibility of consolidation before next up move. In this process we may go near to 7130 but finally it may save. I am expecting this based on history. History suggests that trend which established before poll is expected to continue. In order to add caution I am avoiding higher levels to buy as nearest support of 7130 it almost 130 points away from here and it is substantial to make damage.

Market will prepare its mood for upcoming Union Budget. We saw good rise in PSU stocks in past trading sessions. It was much bigger rise in PSU stock which we have never seen in past many years. We heard that BJP is very likely to go with FDI in retail which is against the promise in their manifesto. It does not matter who is ruling party but for economic policies all are same. What they oppose as opposition, they support same when comes to rule government.  

It may be another day of consolidation. Nifty may open near 7300 and then it will again generate technical resistance at 7325 levels. We may not get clear direction in the zone of 7325 to 7130 levels as Nifty may consolidate in this area.

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Strategy for Nifty May future – SGX Nifty is hinting for opening near 7300. If this happens then we may not have further scope for good rise. It can bounce to come near 7330 at the max. In the down side, Nifty can get support at 7260 and 7220. I am expecting consolidation to continue for today also.

S&P 500 (USA) – It came on dot at 1885 again. These are weak bounce which usually comes in consolidation period. I still below that S&P 500 will break 1860 by this week and it will take a negative direction. One must avoid higher levels for buying activity. In fact, it is not a bad idea to add short at this kind of levels. On long term chart, it is still near to the top. Break below 1860 will drive toward rapid 1810 to 1800 as next target.