04 July 2014: Nifty Elliott wave analysis: 7761 is next indicated resistance based on Elliott wave and it is matching with RSI negative divergence. Buy only if it sustain above 7761 !!!

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

For 04 July 2014: -

On 03 July 2014, FII Bought INR 950.82 crs and DII Sold INR 624.21 crs

I can still say that as long as it is holding above 7685-7660, this market will present pullback view towards high. I am still worried towards big negative divergence on RSI. This is something which technician cannot ignore. Just for that caution, I am advising to be cautious if it misses 7760 levels today. I have already updates yesterday in my intraday updates that we will get initial sell off from high point. We got almost a dip of 50 points in very first hour.

S&P and DJIA hit new all-time high with DJIA crossing above 17000 marks. We will get a hangover opening. I am assuming that Nifty will open near 7750 levels. I suggest waiting for 10-12 points to get a higher cut above 7761 levels. If it sustain above 7761 then we can see levels of 7800 levels.

Equally, if it misses 7761 crossover then ‘RSI negative divergence’ can comes in to play anytime. This can pull the market down. I said this earlier also and repeating now also. It is a tug-of-war between ‘price’ vs ‘divergence’. So far, price is winning.

7761 – is a decisive point.

For today’s trading, I prefer to watch market reaction near 7761 or near 7700 levels. 7761 may be point to short and 7700 may be the point to buy. Question is which opportunity will come first. It hardly matters. Note one thing – above 7761, it is a strong buy. If Elliott wave fails at 7700 then it can fail at any levels. It has newly indicated top @ 7761.

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Strategy for Nifty July future – Nifty July future will get some higher opening based on hang over of rise in US market. 7785-7800 will be a zone of stiff resistance. Cross over of 7800 can generate a strong buy. In the down side, 7720 may give a mild sell. One need to wait for better indication to come during trading hours.

S&P 500 (USA) – This is a great momentum which has generated above 1970. We got close at 1985 and it is looking to hit psychological 2000 marks. Even DJIA closed above 17000 marks. S&P still has a room to move 15 points more before any correction. Trading pattern suggests keeping high low as stop loss to hold long. I am not adding anything more on analysis. I am simply waiting to see 2000 levels. It’s going to be historic event.