26 November 2014: Nifty Elliott wave analysis: A “Bearish Engulfing pattern” has emerged with the top @ 8536 levels. This issues a word of caution before derivative expiry. Nifty support – 8416 and 8380 !!!

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

For 26 November 2014: -

On 25 November 2014, FII Bought INR 1168.94 crs and DII Sold INR 732.12 crs

Yesterday was first day when Nifty has formed a ‘bearish engulfing pattern’. Adding more spice, it came just a day away from derivative expiry. This can definitely make expiry more interesting, wilder and more volatile. One has to be very cautious in this range of trade. It has raised a significantly higher possibility of some big price cut.

Technical charts are suggesting that Nifty should take an intermediate support at 8416. If it breaks 8416 then we can hope for a quick fire fall towards 8380. Once again, we may go in the same trading range where we have traded for most part of the month. On higher side 8500 and 8536 will play as important resistance.

For today’s trading session, we will have intraday trading support at 8429 to 8416 levels. Expiry can make things wild. If it breaks 8416 then only we can have confirmed and meaningful dip from current levels. Banking index is also looking weak but we need to see some decisive breakdown.

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Strategy for Nifty November future – Take yesterday’s low of 8437 as a critical support. If it sustain below 8437 then we can see some quick and decisive dip. On higher side 8500 is a key intraday resistance. Looking on pattern we may have a possibility of 100 points cut anytime now.

S&P 500 (USA) – Based on Elliott wave chart, I cannot advocate for meaningful correction as long as it is above 2040. I have few new words to add here. It seems that 2075 is turning out to be critical reaction point on higher side. I got first hint for some pullback now. Take this straight, if it breaks 2064 then I will take it as hint for a move towards 2040 levels. Medium term trend will be up as long as 2040 holds and race for 2145 will continue. Only something ‘unexpected’ can stop rally.