You must read previous articles and watch the given chart
carefully to understand this article completely.
For 27 May 2014: -
On 26 May 2014, FII Sold INR 84.13 crs and DII Sold INR 208.39
crs
I have quoted this yesterday itself during market hours
before fall begun, “Small cap and mid cap indices are under performing NIFTY.
It may be a signal for double top on daily chart with second top coming lower. I
can conclude above if we see closing goes without fresh intraday high. OR -
more over- a weak hourly close.” Based on this we took short on Nifty Future
from 7490 levels itself which gave a quicker than expect fall of 200 big
points.
According to Elliott wave theory, I have already said that we
are in progression of wave ‘B’ and a top is about to come. Note that we are
dealing on hourly chart right now. We got end point of corrective ‘B’ wave at
7504. This is excellent top as it has words of confirmation of double top.
Above is not the only event for yesterday. By close, Nifty
closed with small negative but small cap index slipped by 3% and mid cap index
slipped by 2%. I have already warned from buying stocks of such indices. I gave
an example – HFCL- which was on 10% up circuit yesterday finally closed in red
at 12.70 but low was 11.60. Where were circuit? It was at 14. Just count in
percentage term and feel the heat. Do not burn your money in this kind of
stock. If you are burning then no one can help you.
For today’s trading technical support will be at 7325 and
then at 7290 levels. If it starts trading below 7325 then we can expect the
re-test of yesterday’s low near 7260. On higher side, it will face resistance
at 7400+ levels. I just believe on thing – sell the rise and sell the weakness.
We may get both today as yesterday.
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Strategy for Nifty May
future – I was
shocked with yesterday’s sell off but I was expecting this. Only thing is that
it came little sooner. Technical charts are suggesting that if it starts
trading below 7310 then we can expect 7260 levels. I can warn that charts may
issue a signal for the move towards 7100 near expiry days. Note that we are
just two trading sessions away from derivative expiry.
S&P 500 (USA) – It is again back to 1900 levels.
This is little uneasy right now but giving all possible sign of top formation.
Still I suggest that one should stop out above 1903 and prefer to wait for
weakness. We cannot expect any good extension above 1903 even after bullish
mode. Based on chart, being bullish is also not making sense even after new
all-time high. From past many months, S&P formed new all-time high but fail
to give unidirectional move. Be on side line and wait for opportunity to short.
