01 September 2014: Nifty Elliott wave analysis: It may take another attempt to hit 8000 levels on Nifty. It may be backed by banking stocks but further move will face toughness. Decisive close above 8000 may guide for 8132!!!

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

For 28 August 2014: -

On 28 August 2014, FII Sold INR 710.63 crs and DII Bought INR 730.43 crs

We got some crucial GDP data on weekend which was in line with expectations. There were some talks which has suggested for a possibility of rate cut next year although this is still a speculation so far. News flow has boosted the sentiments so far.

Derivative expiry was little dull which was also in line with my expectation. So far, there is no exact hint for top but we may be close to a top before correction. Nifty has resistance at 7970. Crossover may add a move towards 8000 levels. We are in September month which is usually bad for equity.

Elliott wave chart is hinting for top either at 8000 or at 8132. Market may pick anyone of these figures. If it has to pick later one then we may have more steam to go up. If it has to pick first one then this market may trap bulls at high.

We have already seen bleeding mid cap and small cap indices which is suggesting for a limited upside above 8000 levels. It is interesting and technically an important week.

For today’s trading it will open higher as suggested by SGX Nifty. DO not buy this gap up. It should fill this gap in coming days. We have many gaps up in past few days and we are trading alarmingly higher than moving average supports. One can easily say a strong buy on speculative long trades but those are beyond technical alarms. What looks easy may not necessarily be a trade.

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Strategy for Nifty September future – Nifty September future may open above 8020 levels which may be highest levels of life time on Nifty spot. Once it takes gap up then there will be nothing left to buy more. Fibonacci technical resistance will comes at 8045 levels which should be equivalent to 8000 levels on Nifty.

S&P 500 (USA) – Is it hint for top? Yes, whatever has to come this week will be best figure for the rest of the year 2014. In my view, maximum permissible top should not be more beyond 2020. Current formation is more like November 2008, March 2009 as well as September October 2002. It is a very known fact that US indices used to fall every time after end of QE. We have some good confirmation that DAX has already topped out with its last leg of pullback rally before fall. September is usually a bad month for equity. I expect rise in gold price and fall in equity price.

One liner conclusion is – A major top will emerge this week itself and then afterward we will not see that figure in September, October, November and December2014. As of now, DAX is giving target of 8000. I say, do not trade. Hold shorts with patience for little long time. Monday is holiday for US market.