22 January 2015: Nifty Elliott wave analysis: Even after a possibility of 8900 I would say, a pullback is coming in a day or two just because this rally is largely based on one stock called HINDUNILVR!!!

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

For 22 January 2015: -

On 21 January 2015, FII Bought INR 1275.59 crs and DII Sold INR 761.60 crs

It has built up too much momentum in very short time frame. There is no single negative close in past 500 points of rise. In general, I can be bullish after this rise too but here is a fact. We have nearly 150 points gap up on 15^th January 2015 due to sudden rate cut by RBI. This gap up is very close to give a trouble to this market.

Elliott wave theory is still saying for rise to continue but it is going to lose its momentum somewhere. If this has to happen then today is best possible day for consolidation based correction. Logically, it has built up five trading sessions in a row. Most important is that the participation was just from key blue chip stocks like sometime by HINDUNILVR or sometime by HDFC. Low participation is a sign of correction. I mean how long I can expect HINDUNILVR based rise. It has already moved from 760 to 950.

For today’s session also we may expect gap up opening. Now, I am expecting a top to emerge for consolidation. Take a note that most global market is on very crucial Fibonacci levels. Whatever the opening comes, we have a chance of seeing a red close today. If it slides below 8700 then it can surely invite a possible price correction. Resistance on moving higher will be 8750 and 8770.

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Strategy for Nifty January future – SGX Nifty is hinting me for higher start which is nothing but traditional. 50% of past 500 points of rise almost goes in gap up only. This does not make too much sense but January month is known for this kind of activities. Technically 8770-8780 will be resistance point. Cross above 8780 can result 8830. Below 8700, we can expect meaningful correction. sooner or later, in a day or two, it is coming.

S&P 500 (USA) – It is the same pop up which I was talking yesterday. The chance is big that it is going to invite bulls to ride on it and then go for some wilder sell off. As of now it looks like this rise will end somewhere near to 2045 levels. I feel that it will give a rise in the very first half today and then it will go in sell off mode by today itself. A big red candle can come in maximum of two trading sessions.