03 December 2014: Nifty Elliott wave analysis: 8500 support is still a key support for Nifty. Unless it give close below 8500 levels do not add fresh short.

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

For 03 December 2014: -

On 02 December 2014, FII Bought INR 106.82 crs and DII Sold INR 40.42 crs

I have already said for support at 8500 yesterday. We got a low at 8504.65 levels. We have not got anything by RBI in its monetary policy review. Next monetary policy will come on 03^rd February 2015. So we have another waiting period. RBI governor has drawn new line for WPI. He is not happy with 6% figure. True, he should not be. I still do not see any big reason to be depressed after RBI policy. Market knows that sooner or later banks rate will go soft only. As Nifty has saved 8500 levels so we can conclude that market is now worried much.

Based on Elliott wave chart, 8500 is a key threshold support. I am not shorting at all from low. “Dark cloud cover” pattern will take its effect on close below 8500 which is a confirmation point. Match of a technical level by two studies makes it more meaningful. I must say that banking stocks are not weak at all. In fact, newer set of banking stocks has gained strength. We will again see rise in banks today.

For today’s trading session, I will look for technical support at 8500 levels. If it breaks 8500 then only I can play to trade on short side. If not then we may see some advance on Nifty. It is for sure that actions will be very limited on blue-chip index. Banking and financial stocks are looking for more meaningful trades. Take a note that if Nifty close below 8500 by any chance then we can see a move towards 8400 levels too.

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Strategy for Nifty December future – Key threshold support for Nifty Future is at 8530 levels. It has taken a turn from 8540 itself. On higher side 8605 is a key resistance for the day. I will plan to take a risk to buy from lower support levels with my stop loss at 8530 levels only. In a choppy scenario, it may not give more than 25-30 points of trades.

S&P 500 (USA) – I have already said that fall will be limited for the month of December unless it takes out 2035 in brutal fashion. Charts are giving sign for top to come at 2075 but it is not giving confirmation. Market may want to move with divergence for whole December month. Somehow, it will extend its rise which may be slow and irritating. Keep an eye on crude oil price. Reason for cheer may be the reason for catastrophe.