30 May 2014: Nifty Elliott wave analysis: Outlook remains unchanged even on new trading month. Wave theory is suggesting for a move to bring it near to 7130 and then a decisive breakdown may come in few days.

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

For 30 May 2014: -

On 29 May 2014, FII Sold INR 522.90 crs and DII Bought INR 195.20 crs

I was expecting this sell off to come on expiry day and it went as the road map suggested. I put some marking for Elliott wave on the chart and it is suggesting that story is not over yet. Somehow, Nifty will go near 7130 before turning decisive. My given chart is an hourly chart. Pictures were little unclear on Daily chart.

Hourly chart has some sense of H&S pattern too. It is suggesting that Nifty can go as low as 7000 to 6900 levels. Today is the first day of new month series. Traders may turn nervous sooner. I can still see that traders are picking odd small cap and dangerous mid cap stocks which is definitely not a good sign.

According to Elliott wave theory on hourly chart, Nifty is in trending wave ‘C’ which is a part of corrective full wave. So we are in wave ‘C’ from 7504 and we have already travelled a distance of nearly 200 points. Logically end point of wave ‘A’ need to be broken. End point of wave ‘A’ is at 7130. This is prime reason that I try to be reserve from buying on rise although stock specific moves are coming to catch for good.

For today’s trading technical support will be at 7200 and then at 7130 levels. If it stays below 7220 then we can expect this fall to continue. On higher side it will face resistance at 7300 levels now. I prefer to short this market on rise only. We still have some positional shorts in our pocket.

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Strategy for Nifty June future – It has key support at 7250 levels now which is on striking distance. Downside will intensify if it will spend time below 7250 levels. On higher side it will face resistance in the zone of 7300 to 7320 levels. Can we see levels of 7150 too in this wave? At least I am expecting this to happen from past few days of trades.

S&P 500 (USA) – So far, journey remains up for US market. Either one use Tom Demark indicators or Fibonacci retrenchment and Fibonacci curve, all were hinting from April month that Top should come as 19XX. Now, it can be either 1903 or 1930, it hardly matters. Core of study is that we are either at the top or at the counting distance from top. I can still say that below 1900 we can get confirmation of decisive dip. Top should come on May month and today is last trading day.