19 June 2014: Nifty Elliott wave analysis: Higher opening is coming after fed comments. Technical resistance for Nifty will be at 7650 plus. Higher levels are still not safe and volatility will continue till union budget.

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

For 19 June 2014: -

On 18 June 2014, FII Bought INR 366.18 crs and DII Bought INR 318.15 crs

We heard that union budget may come in second week of July. Government is planning for big FDI approval for Indian railway. So, railway stocks will be on lime light for the day. Now, apart from this, Indian market may get boost by rise in US market last night.

Charts are not saying that we are going to get a stable rise as we have a heavy supply line on hourly chart. I have warned yesterday also for higher levels. We saw a sharp dip from top on Iraq concern. I am again repeating that levels above 7600-7650 will not sustain in market. Elliott wave study is still hinting for 7400-7300 zone for Nifty before Union budget.  

Now, let us concentrate the charting pattern. Based on Elliott wave theory we got a top at 7700 levels. If I draw it for target then we should get minimum of 7400 levels which can be violent in the area of 7400 to 7300. Hence, I believe that Nifty can enter in the zone of 7400-7300 before giving fresh rebound.

For today’s trading technical support will be at 7530 and 7485 levels and resistance will be at 7600 and 7650 levels. There is a possibility of some higher opening. I am planning for any long trade unless some strong buy will emerge. This market is just heading to trap bulls at higher levels and so one has to be cautious. Remember, if it is trapping bulls at high then so it is trapping bears at low.

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Strategy for Nifty June future – Nifty June future may open near 7590 levels as suggested by SGX Nifty. Technical charts are suggesting for fresh long only if it can surpass 7625 levels with volume. Do not carry away from higher opening. In fact, we may not see 7600 levels sustaining. Even if it sustain then also keep your eye open to trade. Market will be highly volatile from now to union budget.  

S&P 500 (USA) – S&P bounced on Fed comment over economy. WoW!!! It hit 1956 again. Consistent trade above 1956 will give levels of 1970-1980 with big negative divergence. Fed chairperson said that economy is improving as they trimmed bond purchase. It may be true but I am not able to digest. Bond purchase trimming may not have anything to do with growth of economy. Economy always improves by its own. Factors may just support for little. Let us see if S&P sustain. I doubt!!!