24 December 2014: Nifty Elliott wave analysis: 50 DMA support @ 8250. Break below 8250 may cause a fall towards 8215-8200 levels. Derivative expiry may go on lower side if sustains below 8250!!!

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

For 24 December 2014: -

On 23 December 2014, FII Sold INR 444.93 crs and DII Bought INR 516.34 crs

Nifty has a high at 8364.75 yesterday before giving a diving fall. Take a note that it was 61.80% recovery after a correction from 8626.95 to 7961.35. So, it was expected and justified. More than that, we have strongly quoted for reaction to come at these levels. We took a full advantage of this fall.

We have derivative expiry of December month trade. This force to be reserve from trades today and I will act only if some good signal to trade emerges. Take a note that we have 50 DMA support at 8252 itself. This will act as key. If trades sustain below 8252 then we can expect a further dip towards 8200 levels.

Based on Elliott wave theory, high of 8364.75 is peak of corrective up wave ‘b’ which is against the main short term downtrend. I am not expecting any great dip for coming days. So far 8215-8200 is next key support. One thing is clear that if it gets follow up of selling then derivative expiry will go bearish.

For today’s trading session, we can see flat opening. Immediate trading resistance will emerge at 8295-8300 levels. If it spends time below 8250 then we can expect fresh dip. Trade below 50 DMA may put pressure on bulls to hold their long. Will this hide and seek game continues at 50 DMA.

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Strategy for Nifty January future – It is trading with very heavy premium of 77 points right now. This index future cannot carry such heavy premium for long time. Justified premium should be around 40-50 points so it has 25 points of extra premium so far. Technical charts are saying for support at 8320. Below 8320 we can expect quick 50 points cut. It is derivative expiry day so I am not expecting me to trade.

S&P 500 (USA) – So, as expected, it is on new all-time high again. This is impressive. I am looking for a move above 2100 levels. It does not matter if it goes dead near Christmas. Technical charts remain same. It is up and it will not easy to break even 2060 levels in normal circumstances. Take it this way – this is perhaps only index of the world which used to give higher high from past few days. Just prefer to be long only.