30 July 2014: Nifty Elliott wave analysis: Just a day away from derivative expiry of July month series. Technical support = 7720-7700. Resistance at 7800 < 7842. Higher levels demands caution.

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

For 30 July 2014: -

On 28 July 2014, FII Bought INR 75.04 crs and DII Bought INR 55.91 crs

Even on Monday’s trading session we saw a high at 7800 and then a fall of almost 78 points before closing just below 7750 levels. We have derivative expiry tomorrow. It may just add further volatility. I had a view in the beginning of this week that a short term top will come by this month only.

Nifty has 20 DMA at 7675 levels which my act as crucial support. On higher side it may face stiff resistance at 7800 levels. Suppose if it stand above 7800 then it will attract bulls again. Here is a caution, derivative expiry change any technical levels. I am not very keen on shorting only although it is my view only.

Mid cap and small cap indices are under performing and this may be major concern before expiry. Even if blue-chip indices head higher it will not change the broader views. We may be running here and there near top. Some forced short covering may go in favour of bulls before expiry as system may have shorts which like to cover their position if closing goes near all-time high.

For today’s session, we may get some stable to positive opening. A move is possible towards 7800 levels again with a view for buy in dip but protect those with stop below 7720. On higher side, even top will attract selling and sell point can emerge near 7800-7810 levels. It can never east to trade when such views emerge for trades.

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Strategy for Nifty August future – Nifty August future is giving a hint for opening at 7800 levels which may say that a gap up can favour bulls. If this happens then any small dip will be treated as opportunity to buy only with stop as 7770. Meaningful and enjoying trades will come only if it breaks 7770. Will it come? Let us see.

S&P 500 (USA) – It is not moving anywhere since June 24^th 2014. It stuck in the same range. Once again it came below 1970 and it may head towards 1956 to 1950. I will convince only at decisive break below 1950 to say for confident short. So far, topping formation is giving short at tops near 198X and 199X but those are mild short signal. Let us see what can come now.