08 August 2014: Nifty Elliott wave analysis: Nifty hourly chart has ‘ending diagonal pattern’ and now adding H&S pattern. Key support will be in 7600-7590 area but breakdown is likely. Expect stiff resistance at 7709 now.

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

For 08 August 2014: -

On 07 August 2014, FII Bought INR 73.07 crs and DII Bought INR 228.99 crs

What a wild trading session we had yesterday. I find it suitable to avoid. Ending diagonal pattern has taken its grip over clarity. If one goes through hourly chart then one can sense that NIFTY has formed H&P pattern too. This is something which should be concerning now. Nifty has closed below 7650 with a wild swing in between. High of 7709 was in accordance with wave theory.

I still believe that it has support at 7593 levels. It is still far by more than 50 points. Now, support if it hit 7593 then H&S pattern will on full effect. If I include all patterns then I see a possibility of dip on nifty towards or below 7422 levels. Yesterday’ high of 7709 will act as stiff trading resistance as of now. I like to add a warning on mid cap and small cap buying by investors. Have a look where Indian rupee is swinging now. It’s beyond 61 levels. Do not believe anything blindly.

For today’s session, I am expecting some lower opening. If it give up and start trading below 7640 then we may see concerning dip towards 7593 levels. Remember that mid cap and small cap indices are under performing. Sell off may continue and we should be on hurry to pick support. Let us see.  

NIFTY 50 DMA comes at 7602. So, we may get strong support in 7600 area but problems will be bigger for traders if one wants to trade long.

I will update about supports in my intraday updates. I will get better idea of sell-off during hour itself. Will be give break below 7640 and sustain to hit 7593? Will it hit 7540-7500 by today itself?

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Strategy for Nifty August future – Nifty August Future may open negative to 20 points. It will get immediate support at 7650 to 7640 levels. We may see interesting and concerning dip if it sustain below 7655 levels. On higher side 7700 to 7715 will act as stiff resistance. I suggest shorting on weakness. If it sustain below 7650 then we can get immediate selling of 50-60 points.

S&P 500 (USA) – So, a final close below 1910 came and all that happened when futures were indicating higher when Indian market were trading. Have we realized that US indices are almost at 3 months low? Yes, and I see no possibility of any sign of pull back either so far. Take a note that it came as we have not seen any dip in May month. Expect some pause at 1899 and 1875. It is still a summer sell off for US market.