14 January 2015: Nifty Elliott wave analysis: If trading on Nifty spot sustain below 8260 any moment then we can expect the beginning of price correction against recent recovery.

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

For 14 January 2015: -

On 13 January 2015, FII Bought INR 235.09 crs and DII Bought INR 46.06 crs

I have advised caution at higher levels. Reason becomes clear now after seeing the dip in last hour yesterday. It hit a high at 8356 levels before seeing a fall to hit 8268 levels. It was very sharp. Take a note that 100 DMA is at 8158 levels which is almost 2% from current levels.

50 DMA is at 8342 as of now which is advancing. This will act as stiff resistance for today’s trading session also. We saw fall in US market also from higher levels yesterday night. We have no great sell signal yet on the market but it may be coming sooner. I have already advised caution for second half of this month.

Based on Elliott wave theory we are in corrective up wave ‘c’ which will also be divided in three waves as shown in given chart. It has fulfilled the condition of top of wave ‘c’ in wave (b) itself. Big question is that if this is only the pullback in wave ‘c’ then we may not see the violation of 8445.

For today’s session, it will get a fair opening without any big gap. Technical support will emerge at 8280 and 8250. I say, if it can stand and spend time below 8320 then we can expect another sharp cut from these higher levels. Take a note that this rise has dominated by just one index heavy weight HINDUNILVR. This is suggesting that index can be more volatile if price corrects.

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Strategy for Nifty January future – We can expect opening go around 8340 levels. Expect technical support at 8320 and at 8270. It may not provide any easier trade sooner. I am again advising caution at higher levels again. Question is – can Indian market able to show better relative strength?

S&P 500 (USA) – This dip from higher levels is again giving shocks to bulls. Bulls have hope as long as it holds 2000 levels. This is still making some sense that something is changing. No matter up or down but range become wider compared to second half of last year. Technically, I am not buying as of now but I will plan to review for buy if it tries to save 2000 in this dip. One must note that 2000 must be a compulsive stop loss for all long.