02 June 2014: Nifty Elliott wave analysis: Slow and steady move is showing the expected move towards 7130. For today’s trading 7200 levels will be key. Avoid Mid cap and small cap buying.

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

For 02 June 2014: -

On 30 May 2014, FII Bought INR 2277.62 crs and DII Sold INR 458.15 crs

We saw dip in Indian market throughout past week of trades. It is looking to extend profit taking mode for this week too. I have already suggested that I am expecting move towards 7130 at least. So far, there is no decisive attempt by bulls either. It is mid cap and small cap indices which is heading northwards. I am not interested to buy add mid cap and small cap stocks when their pace of rise goes dangerous like recent one.

Market should focus on next RBI monetary policy review which is scheduled to come tomorrow. There is no expectation any change in bank rate this time. Things are not going to be smooth for RBI especially when economy needs to face poor monsoon. So far, expectation builds over new stable government which is bigger factor.

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 or if Nifty stay below 7200 levels.

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Strategy for Nifty June future – Nifty June future gas broken 7250 crucial mark. Now, logically it should take a move towards 7150 levels. It should be a strong possibility for this week of trades. To be on safer side, it will generate better short if it breaks 7220 in convincing way. On higher side 7270 to 7290 will act as stiff trading resistance.

S&P 500 (USA) – S&P performed more than 1% better than Dow Jones in recent rise. I still need to keep the analysis same. As long as it is above 1900 it is looking safe for bulls. I am already expecting a top to emerge at 1930 which is very close now. It will be safer to wait for top to emerge in decisive way before shorting. It is now turning like I am missing long opportunity. As I missed the one then also I will jump on wrong one.