09 June 2014: Nifty Elliott wave analysis: As long as Nifty is above 7560 we can hope for more rise. A move towards 7700 is also a possibility by early this week. Do not buy in volatile top if comes.

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

For 09 June 2014: -

On 06 June 2014, FII Bought INR 1283.04 crs and DII Sold INR 315.15 crs

It goes at life time high close on Friday with rapid short covering in last hour of trade. This shows that more steam has left in the market. A life time high is itself a big sign of bullishness. There are negative divergences on many momentum technical indicators but those have lesser value. Right now, money flow and momentum is on governing state. I am saying about momentum as small cap and mid cap indices are still rising with rapid pace.

Basic of technical analysis says that trend once established is likely to continue than to reverse. This up trend is coming from 6638 levels and stretched a lot. My expectation is that it can come near to 7700 also. Caution is advised for sure at these levels especially mid cap and small cap stocks. Many stocks of small cap and mid cap indices are rising dangerously.

One need to note that market is preparing itself for upcoming union budget. Hopes are really big and so far current NDA government is justifying those hopes. To a great extent, we need to accept that we will see another hope rally till budget which will come next month. Even if correction comes, that will not last longer

For today’s trading technical support will be at 7560 and then at 7504 levels. Higher opening will leave this market clueless to deal but prefer to wait for initial hour to conclude for trend. As long as it is above 7560, we can expect more rise.

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Strategy for Nifty June future – Nifty June future may open near 7630 levels as suggested by SGX Nifty. Technical charts are suggesting for support at 7590 levels after opening. I will not prefer buy at top. I can opt to trade long for intraday if dip comes and it saves 7580-7570 levels. At some point, top is going to be extremely volatile. One need to stay away from those wild top if comes.

S&P 500 (USA) – Well, 1950 is on for S&P. COEB volatility index VIX is below 11. It is now at 10.73. This is already hinting that rise is going to be very limited from here. It does not matter even if we are at life time high levels which are usually bullish sign. Technical charts are saying for support at 1930 as of now. I am just waiting for some strong sign for summer sell off which is bound to come. Below 1930 will be my first sign for short. Short only if desired signal comes.