02 December 2014: Nifty Elliott wave analysis: “Dark cloud cover” pattern emerges. Key support – 8500, if breakes then dip is possible towards 8400 levels. RBI policy will be a key.

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

For 02 December 2014: -

On 01 December 2014, FII Sold INR 12.36 crs and DII Sold INR 555.15 crs

One day market sense that rate cut is coming and very next day it turn cautious with a dip. This confusion by market has formed a pattern called ‘Dark cloud cover”. Key characteristic of this pattern is – a long while candle followed by a red candle with more than 50% washed out from top. This gives a hint that Nifty may breaks 8500. If this really breaks 8500 then we may see a bearish week. So question is – Is RBI going to disappoint the market? So far, charts are saying ‘Yes’.

Another key point is 8620. I have already said that 8620 is another key resistance suggested by Elliott wave analysis. We saw a top at 8623. Take a note that 8623 was impulse high which came at very first minutes.

For today’s trading session, we will have intraday trading support at 8536 levels and then at 8500 only. I am expecting correction for today’s trading session. It looks like RBI will not give what market wants. I am expecting a volatile session too. Banking index may see big hurt. On higher side, Nifty will see resistance at 8620-8623 only.

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Strategy for Nifty December future – SGX Nifty is showing for opening with 25 points loss. I will not prefer to act till RBI policy comes. We can expect rapid dip towards 8500 levels in odd fall. On higher side 8640 and 8670 is a meaningful key resistance. Let us see what is coming.  

S&P 500 (USA) – Wow!!! I was not expecting that index would show this much respect for 2075. Well, it goes in my expected line. I came off from my short at 2035 only and it moved by 2% after that. Now, it is giving some sign of top formation but I am not sure for top yet. Dip will come but it will be limited unless it brutally breaks 2035. I am still not advising to trade this index.