05 June 2014: Nifty Elliott wave analysis: Technical resistance will be at 7450+ levels. We may see dull trading activity. Small cap and mid cap indices are alarming but rise may continue.

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

For 05 June 2014: -

On 04 June 2014, FII Bought INR 192.56 crs and DII Sold INR 191.68 crs

It was dull day yesterday on Indian indices. Where is Nifty right now on chart? Join two tops, on at 7563.50 and 7504 then extend the trend line. This is decisive supply line and reactions may be reversing in nature. Technical support will emerge at 7370 levels which will also be a threshold for selling. We are currently seems to be in triangle consolidation with contraction. I am concluding this based on hourly chart. Please refer to the image shown.

I have quoted few days back also that Nifty will face resistance at 7450+ levels even after crossing 7400 levels. So far, things are almost same. There is no moving average support or resistance near current levels. This is something which can trouble market if it turns volatile anytime.

Small cap and mid cap indices are still performer of the market. There are many stocks in this pack which are moving without any great base. Investors must be very cautious on selection of stocks.

For today’s trading technical support will be at 7370 and then at 7340 levels. On higher side, it will face resistance at 7450+ levels. There will be a day when mid cap and small cap indices will underperform Nifty.  Once, under performance of mid cap and small cap starts then we may conclude for top.

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Strategy for Nifty June future – Nifty June future may open near 7410 levels. It will be better to stay away from trading till clarity. It may be another dull day as long as it hold 7370 and stay below 7450. There is no great clue for trading. Wave patterns are suggesting that we may see some topping pattern but those will confirm only below 7370.

S&P 500 (USA) – S&P is inching slowly towards 1930 levels. I still believe that it may over shoot by some points. So far, bulls have full control over the market and support threshold is far away. As long as it holds 1900-1903, we can see extension. We may have trading support at 1918-1915 levels. My anticipation is that we are near to top but still not on exact top. Wait for at least first signal of brutal slip.