03 July 2014: Nifty Elliott wave analysis: IGNORE all negative divergence of momentum indicators. NIFTY is very likely to hit 7800-7840 levels as next bullet fire. Use dip to buy and keep 7660 as stop loss for all long.

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

For 03 July 2014: -

On 01 July 2014, FII Bought INR 856.35 crs and DII Sold INR 774.66 crs

It has moved above 7663 in a gap up and then successfully crossed above 7700 levels. Since then there is no stopping and closing was also stronger than ever. I have already said that if it crosses 7700 marks then it will violate A-B-C corrective pattern and that’s too with big negative divergence. Equally, one must note that it’s lastly “Price” which pays. So, how Elliott wave looks like after 7700? Here it is,

It has strongly generated a strong wave reversal with big negative divergence. Divergence will take its effect only after few negative closes. So far, chart says that Nifty may hit 7800-7840 as strong possibility. As long as Nifty is above 7685 to 7660, trading direction will be fully up.

So, market will be on strong side as long as it holds 7660 or coming near to 7840. One must market that it may still have 100 + points more on higher side. Also, it is looking has a break of flag pattern which is bullish. So top can still far away. This must be a pre-budget rally.

While concluding with technical indicators and Elliott wave, I must say that it is only “PRICE” which pays in stock market and it is always my prime focus. The “PRICE” is up and rising. So, basic thing, “PRICE” is up and primary up trend has established so price is likely to be up. RSI has a big negative divergence which will hunt my mind to be cautious. In fact, RSI is as ugly as bullish NIFTY. It’s not very rare, in general rise always become very rapid in this kind of pattern and indicators want to match with price.

For today’s trading, one can prefer to buy some intraday dip and it will be good if it comes near 7700 levels. On higher, side 7800 may be in the test in a day or two or three.

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Strategy for Nifty July future – Nifty July future will open well above 7760 levels. I like to wait for decisive dip to buy with my stop loss at 7700 which will not change in any circumstances. It will be good if I get a dip around 7720 to buy. I say, price is brutally up and it is expected to be up till budget.

S&P 500 (USA) – It was just 4 points range of trading throughout the day. This is what I say that steam is running short after every rise and there is no feeling of fresh buying. It’s like market is dragging higher rather than running higher.  It means that market is forcing traders to be long but it remains choppy. I still say, psychological 2000 may be on hunt. It can either hit or miss by small margin. Before 2000, it can 1980 as a hurdle. Trading support for the day will be at 1968 and then at 1956.