07 August 2014: Nifty Elliott wave analysis: Nifty hourly chart if forming a serious pattern for extension of dip. Have a look at 7640 very carefully. If it fails to revive near 7640 then it can extend fall towards 50 DMA at 7575 levels.

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

For 07 August 2014: -

On 06 August 2014, FII Bought INR 283.87 crs and DII Bought INR 32.59 crs

I have already discussed about ending diagonal pattern on hourly chart yesterday. We saw a dip as a result. This dip got lots of fuel in second half yesterday. Well, confusion over hike in FDI limit in insurance is also giving a dent in market sentiment. Are we still in the phase of policy paralysis? I am scared. Practically, nothing has changed so far. Indian rupee is still struggling. Inflation is beyond RBI comfort limit.

Nifty closed at 7672 levels. Immediate support will come at 7640 levels. Now suppose if it breaks 7640 then we are bound to see the levels of 7593 to 7575 in downside. It is another confirmation that 7840 is just turning out as short term top. On daily chart it is third lower top which we saw day before yesterday. So far, it is lower top and what we need is the addition of lower low. It means that we have strong support at 7593 levels. Close below 7593 will name it as lower low.

For today’s session, I am expecting some lower opening. If it give up and start trading below 7640 then we may see concerning dip towards 7593 levels. Remember that mid cap and small cap indices are under performing. Sell off may continue and we should be on hurry to pick support. Let us see.  

I will update about supports in my intraday updates. I will get better idea of sell-off during hour itself. Will be give break below 7640?

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Strategy for Nifty August future – Nifty August Future may open negative to 20 points. It will get immediate support at 7655 to 7640 levels. We may see interesting and concerning dip if it sustain below 7655 levels. On higher side 7700 to 7715 will act as stiff resistance. I suggest shorting on weakness.

S&P 500 (USA) – It was volatile last night but almost remain unchanged. Most important is that it has formed a low very near to 1910 and then took an intraday bounce. It is confirming for support at 1910 levels. Even for today’s session, resistance will be at 1925-1930 zone. In the down side, break below 1910 will give some meaningful dip from current levels.