28 July 2014: Nifty Elliott wave analysis: For derivative expiry week - most important support = 7750!!! If it breaks 7750 then we can see quick tip towards 7675 to 7660 levels. 7841 will act as stiff resistance now.

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

For 28 July 2014: -

On 25 July 2014, FII Bought INR 125.51 crs and DII Sold INR 210.02 crs

For Friday’s trading session, I have quoted for resistance at 7860 (hitting this level was not a compulsion) and support at 7750 levels. It has followed the road map and hit a high 7841 and then slipped to hit a low of 7749 before closing at 7790 levels. Major disappointment is that Elliott wave pattern is now looking for consolidating move on daily chart rather than trending chart as shown in the figure given. 

When Nifty hit a fresh all-time high then this kind of sell off was not expected in follow up session. As it came so one has to be very cautious for this week as its derivative expiry week with one holiday tomorrow. Elliott wave pattern is giving short term support at 7393 levels which is too far right now. Extremely short term support is also at 7660 levels. Only pleasant thing is that it has trading support at 7750 which was tested Friday and closed with a bounce. Current situation is not broadly in favour bulls. In fact, to a big extent it may favour bears only.

If 7841 is turning as a top then we may expect this expiry near or below 7660 levels. Take a note that even US goes under sell off. Major concern of this sell off is that it came after mid cap under performance and it happened everywhere in the world. Crucial 20 DMA support for Nifty is at 7675 levels. Things are giving room of 100-150 points dip anytime now.

For today’s session, opening may be nervous and if it sustain below 7810 then expect another move towards 7750 levels. Break below 7750 will invite few quick unwinding. Only above 7810 one can expect some stability in market.

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Strategy for Nifty July future – Nifty July future is giving a hint for flat opening. Immediate trading resistance is the zone of 7810 to 7825 levels. 7750 will act as crucial trading support. I still believe that one can trade short on rise. Well, first half may act as choppy move but decisive movement may come in second half only. Keep an eye on 7750, if it breaks then it can see quick dip.

S&P 500 (USA) – It’s a dip which came immediately after new all-time high just like our market. Technical charts are suggesting for a move towards 1950 again. Once it closes below 1950 then we can say that top has confirmed. Even for this week I will expect test of 1956 -1950 levels.  I suggest for short on any pullback towards 198X, 199X and 200X.