14 August 2014: Nifty Elliott wave analysis: Technical charts are still saying support at 7690-7680 levels but mid cap and small cap indices got sold with heavy alarm. This market is again sell on rise now.

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

For 14 August 2014: -

On 13 August 2014, FII Bought INR 718.27 crs and DII Bought INR 22.03 crs

Before beginning have a look on different indices. Nifty – up 0.16%, NIFTYMIDCAP – down 2.37%, CNX SMALLCAP – down 3.34%.

Above phenomenon is always alarming if it comes near all-time high on long term blue chip indices chart. We have strong possibility of bear attack on Nifty anytime at higher levels. Take a note that as long as Nifty is above 7680 it will be very difficult to present any view for profit taking just based on Nifty chart. If I am advising selling at higher levels, then it is derived from other indices chart.

It is almost clear that one should not try to catch the falling knife on mid cap and small cap indices. JPASSOCIAT slipped from 90 to 51 levels. Yesterday, it slipped over 9%. IBREAEST slipped from 110 to 62, yesterday it slipped near 9%. These are the example which we have predicted for shorts. List is even bigger. One should try to understand the psychology of the market.

“Fall in mid cap says that now investors are not able to find value in market and hence switching their money in front line or defensive stocks. This also says that top is very near.”

For today’s session, I am expecting a flat to soft opening but it will find itself difficult to cross above 7760 levels. I am again saying that 7690 levels will have good trading support. Once it close below 7690-7680 levels then we can confirm for fresh wave of down side.

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Strategy for Nifty August future – Nifty August Future may open on flat note near 7740 levels which is definitely against broader market message. We have stiff trading resistance at 7780 levels. Technical support will come at 7700 to 7690 levels. Once it breaks below 7690 then we can expect for the retest of 7550 levels. Today it last trading day of the week.

S&P 500 (USA) – S&P closed above 1945 and looks to extend little more from here. Now it is well 20 points away from its crucial support of 1925. So far, this move is looking to extend towards 1958 levels. What I can conclude form chart is that we are seeing short covering rise above 1925. There is no sign of weakness yet. Whenever next round of sell off begin it will take out 1900 levels this time. Be cautious of any higher levels near 1958 or just before.