15 July 2014: Nifty Elliott wave analysis: A bounce to come from oversold and support near 7400 to mark point ‘b’ on Elliott wave chart. Possible top and resistance = 7500 or 7530 !!!

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

For 15 July 2014: -

On 14 July 2014, FII Sold INR 558.25 crs and DII Sold INR 331.52 crs

Nifty has closed just above 7450 with a low at 7422 levels. I have already said that 7400 will offer good trading support. Nifty is falling from past five trading sessions in a row and it slipped from 7808 to 7422 levels. So, it goes in over sold zone on hourly chart.

I still say that fall has not done but a bounce is coming. Traders can read behaviour of RSI on hourly chart. From over sold zone and near to 7400 support, if bounce comes then it should welcome. Question is – is this bounce good to buy? Simple answer is that do not try to buy top as those may come sooner than expected.

I have added few long from yesterday’s low and I will opt to offload sooner with gain. Do not get tempted with volatility and rise in volatility. What I feel is that this bounce will be over in the zone of 7500 to 7530. It will be hard to move above 7530 levels sooner. On Elliott wave chart, I am in search to draw a point ‘b’ which should be on upward side. Will I get it today? Chances are high. Elliott wave learner must know that to mark point ‘b’ we at least need a positive close.

I am repeating that Nifty can drag towards 7200 once this bounce is over. Do not opt to buy top. I will try to work with possible top for intraday.

For today’s session, I have a strategy to hold my long till 7500+ levels. If I get upper end of 7500 to 7530, I will off load.

Technical resistance = 7500 < 7530

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Strategy for Nifty July future – Nifty July future will open on stronger note above 7510. If it sustain above 7510 then we should see immediate 30-50 point’s jump. It is a technical buy if it can sustain above 7510. So, keep an eye on challenging levels of 7510. We may have some short covering rise. I still warn that selling may hit at higher levels so be cautious if you are trying to deal rapidly.

S&P 500 (USA) – I said that I like to add short on bounce but bounce must give me toppy formation. Where is the sense of toppy formation if S&P closes near day’s high from past few days? In my view, we are coming close to those levels. In clear words, S&P will find it hard to break 1985 from here onwards. Well, I have already quoted few days back that I like to see double top formation with second top lower than first one. Here we are, so bounce is almost done and a hard sells off coming.