05 September 2014: Nifty Elliott wave analysis: NIFTY still need to give clear sign of correction. It is near top but not yet defining top. Support for the day is at 8060 – If it breaks then expect 8030-8000 levels.

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

For 05 September 2014: -

On 04 September 2014, FII Bought INR 1697.74 crs and DII Sold INR 555.23 crs

FIIs have bought very heavily in cash segment. Market was already weaker throughout the day yesterday but bounced in last 30 minutes of trade. Well, we got ECB rate cut in evening hour and it might be the only reason which Indian market has sensed earlier. This event has failed to impress any indices except Euro zone. US market gave up all its gain and closed red.

I have already expressed my view few days back that US market is very near to give a long term top. A top, which may not be visible for rest of 2014. This top can be maximum at 2020. So far it is 2010 on S&P 500. I accept this as top. Rest other market may see catastrophic effect.

Let us come back to Indian market. Even at life time high there are series of mid cap and cap and small cap stock which has given massive fall in past few days. I am using a common investment psychology. People first get rid of risker asset and hence they are selling mid cap. Once, it’s over then they will sell frontline. Then, rally will said to be over.

For today’s trading session, I assume that yesterday’s low of 8060 will act as very crucial threshold for bears. Bears want to enter in the market and they are just trying to find their edge. I still believe that 8000 to 7970 may offer good support in dip but it will be decided once those come.

On higher side 8142 is only decisive resistance. Can we get sell off on Friday? Let us see.

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Strategy for Nifty September future – Nifty September future should open soft to negative. As it’s a wild market so resistances are spread with wider gap. Only meaningful resistance is at 8180. We still need to see it sustaining below 8090 to say for any weakness after recent rise. I am still not touching Nifty future for trades on short side. If it can sustain below 8100 to 8090 then only I will think for shorting. I hold options only.  

S&P 500 (USA) – It hit a test at 2011+ again and then slipped to close in red at 1998. I need to say that S&P just need one close below 1990 to confirm a top which is likely to happen this week only and just one more day left. I still say that 2020 is a maximum possibility as long as it stays above 2000 but today’s close is below 2000. Hence, we can hope for a move towards 1990. If it breaks 1990 then we can see 1975-1970 as first target.