11 December 2014: Nifty Elliott wave analysis: Once again, key support is at 8280-8290 for Nifty. As long as it holds these levels, do not short from nearby levels. Panic expected if breaks 8280!!!

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

For 11 December 2014: -

On 10 December 2014, FII Sold INR crs and DII Sold INR 519.05 crs

So we saw recovery with a low at 8317. It went as the roadmap suggested yesterday. Now, we saw mammoth drop in US market last night based on fall in energy stocks. It may give some odd levels in opening minutes. I still believe that some recovery should come as long as it holds the support of 8290 to 8280 levels.

Based on Elliott wave theory, we are in wave ‘a’. We should see a possible recovery for wave ‘b’ which can come around the levels of 8480 to 8500 levels. We should see a development of wave ‘c’ after wave ‘b’. To see a wave ‘b’, most suitable levels comes around 8280. It is not a compulsion to hit 8280 as a dot. If it breaks 8280 then things will surely turn worrisome on wave chart.

For today’s trading session, we may see another lower opening. It may be around same levels as of yesterday. Reason for this down opening will be just a drop in US market. I again advocate for recovery from levels near to 8317-8300 levels. Important support stands at 8290-8280 levels.

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Strategy for Nifty December future – As per SGX Nifty, it looks to open at 8370 levels. Important key support will emerge at 8350 levels only. Technical chart will hint for recovery till it holds 8340-8350 levels. Do not short the dip. I see another possibility for recovery from lower levels. Note that 8280 is 38.6% price correction against the rally from 7723 to 8626.

S&P 500 (USA) – Drop in energy shares put additional pressure on Wall Street. A factor which was looking sweeter few weeks back is looking poisonous now. OPEC has warned for slow pace of recovery in economic next year. Is this alarming? Well, world was running on stimulus from year 2008 onwards and this is first time when world has to go by its own. Based on chart, I have quoted that market could fall on something unusual. It’s proven that that unusual phenomenon is unusual fall in crude oil price. I am still not on trade on this index yet. Below 2035, I do not see much scope to buy. Equally, do not short. If it is wave ‘a’ on fall then a wave ‘b’ must come with recovery. I will short for wave ‘c’.