23 May 2014: Nifty Elliott wave analysis: Consolidation is still expected to continue. Technical resistance will be at 7325 – 7350 levels. Can we see some decisive mood on final day of the week?
You must read previous articles and watch the given chart
carefully to understand this article completely.
For 23 May 2014: -
On 22 May 2014, FII Sold INR 294.99 crs and DII Bought INR 203.07
crs
Majority of action has shifted to mid-cap and small cap
indices. CNX Small cap index has seen a gain of 3% yesterday and mid- cap index
shoot up by 1.75%. These are not the space where I like to deal much. This may
be a hint that retail investors are traditionally hitting market to buy the
top. Still, participation is not too big to conclude so soon.
I have constantly focused on resistance at 7325 to 7350. We
saw intraday dip again from those points. Most of the time this week, we saw
higher opening – rise in first half and then profit taking in second half. It breaks
the continuity of the chart. Market is still not in the mood to take decisive
direction. This is a zone of consolidation and it is tougher to conclude
trading direction.
On higher side, Nifty has resistance at 7325. The best
bullish way that market can opt is that if it correct from current levels and
rebound from 50% support zone. Remember, this has happened when it rebounded
from 6638 levels. At that time, 50% support was at 6640. Market is likely to
take direction near upcoming union budget and its announcement. Above chart is
explaining the ‘corrective’ the wave down.
For today’s trading also technical support will be at 7240
and then at 7200 levels. On higher side, we may see opening near 7300 but
tougher challenge will come at 7325 to 7350. It is the final trading day of the
week so we may see some direction in second half only.
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Strategy for Nifty May
future – It has
generated a pity odd pattern. It is taking a gap up, rise and then profit
taking in second half. This kind of pattern generally gives a signal for bears
command but strong sell signal is still missing on chart. SGX Nifty is hinting
for start at 7320 again which is odd 20 points higher. Do not buy at top,
prefer to ignore Nifty trading for first half.
S&P 500 (USA) – I had a view yesterday that sell
off should begin but that did not happened. S&P scaled a high at 1896 and
closed at 1892. It is likely to complete right shoulder. Now also, I believe that
I should keep view bearish as long as it is below 1903. It has shocked me
little with the strength. Today will be last trading day of the week and we may
some decisive movement. One thing is for sure, if it takes out 1900-1903, I will
stop out.
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