10 July 2014: Nifty Elliott wave analysis: NIFTY highlight prediction – a swing of 4% may come. Either a fall of 4% from top or a recovery of 4% from bottom. Let a primary trend establish to trade.

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

For 10 July 2014: -

On 09 July 2014, FII Bought INR 645.19 crs and DII Sold INR 265.19 crs

We are on budget day. This date is as important as 16^th May 2014. This is first test of reality of hope for Modi government. Market wants to measure their capacity over the hopes that it has built in past more than six months. We saw a volatile session yesterday but there were many mid cap stocks which have slipped substantially.

I am simplifying market expectation from budget. One line – What budget can give to reduce fiscal deficit? If budget gives hope to stock market then it will take away hopes from voters. Hence, it is going to be tough task. Whom can finance minister is going to give priority. Infra and reality stocks are nervous before budget.

It’s a mess on chart as you saw this but note all support -

7520>7442>7393>7342>7215

We can see intraday bottom out of any one of these supports. Threshold support for fall will be at 7550. If it breaks below 7550 then it will only favour bears. On Higher side it needs to stand well above 7650 to convince bulls. So we have full 100 points range to speculate. I have no forward position to trade.

For today’s session, opening should be on nervous but on higher side only. Do not trade first hour as market will enter in action mode only after budget speech starts. I have few points to even support bulls. Well, a corrective small up wave should come from low against sharp fall. I predict for 4% swing in post budget sessions. Remember, this 4% can be either fall of 4% from top or recovery of 4% from bottom.

So, let a primary trend establish. Adventure is definitely not required at this time.

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Strategy for Nifty July future – Nifty July future should start near 7630. Do not short until it breaks 7570. Do not attempt to short a market which goes in recovery mode. It is strongly advisable to wait for a primary intraday trend to develop which can establish after budget speech only. Do not even make a mind frame that this market can crash only.

S&P 500 (USA) – I had different thought about pullback. In my view it should not move above 1970 but it moved. It is still fine so far as I want to short this pullback. It is still fine if I get something in the range of 1985. Well, let it go. This bounce is coming to form a double top pattern with second top lower than the first one. I like to wait to see today’s action too for adding short.