22 July 2014: Nifty Elliott wave analysis: 7725 may act as stiff resistance and good trading support will emerge at 7660 to 7650 levels. Unless it closes below 7660-7650 we cannot say for the end of wave ‘b’.

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

For 22 July 2014: -

On 21 July 2014, FII Bought INR 161.17 crs and DII Sold INR 181.16 crs

Nifty traditionally took a pause near another resistance. Only difference is that this time it was 7725. I can still say that conviction is that we may see some dull trades near resistances now. Elliott wave is giving me a sense of resistance at 7725 and it needs a close below 7660 for confirmation. It is saying that we are almost near to end of wave ‘b’.

We should less care about those indicators or theory which market is not following. Last its price which pays. Right now, Elliott wave is giving resistance after resistance and market is crossing all. Charting pattern shows that lots of steam still left in the market.

Once again, be cautious at higher levels. For today’s session, one can expect trading support at 7650 and a trend reversal support will be at 7590 levels. It may open higher by 25-30 points so this gap will play crucial role. It is not going to be simple trade as more complex technical behaviour will emerge sooner.  Complex trading behaviour invites more impulsive moves.

Take a note that market may take moves only in second half now. Usually, first half remains dull. It does not matter why this happening is. Unless it closes below 7660, we may not have conviction for correction call.

Well, charting has totally different picture. Elliott wave us suggesting that top should come while charting pattern is suggesting for a quick fire 200 points of rise. Yes, it means we may visit 7800-7860 levels. Hence, I am marking this week as most crucial one.

Week will end either at 7400 or at 7860. I can able to present clearer picture with the progression of week.

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Strategy for Nifty July future – Nifty July future will open higher near 7710. This should again act as resistance.  7720-7730 will act as immediate stiff resistance. In the down side it will get support at 7670-7660 levels. Shall we trade in the zone of 7660 to 7730? My answer may not be affirmative. Let us see what can come near Nifty spot resistance of 7725.

S&P 500 (USA) – It closed in red. US indices are moving like a pendulum in the zone of 1950 to 1985 ranges. It slips from high and rising from low of the range. So far, it is not giving any clear signal. I am anticipating a top formation but threshold support of 1950 has not broken yet. It is little irritating now. I still believe that July month top may emerge as a top and a sell off will hit. Nothing great to add for the day.