29 January 2015: Nifty Elliott wave analysis: Derivative expiry today. Trade limited for intraday. Key support = 8870, Below 8870 expect 8800 !!!

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

For 29 January 2015: -

On 28 January 2015, FII Bought INR 1723.17 crs and DII Sold INR 1292.70 crs

Yesterday’s high on Nifty was 8985 levels followed by almost 100 points sell off from intraday high point and closed flat. This is DOJI formation which is usually is topping sign. Indian market is 7% higher than its 100 DMA while US market is travelling below its 100 DMA. This kind of outperformance never sustained for long in past. It will be interesting to see how long this can sustain this time.

We have derivative expiry for January month series today. What we have seen in first half yesterday was a short covering. If shorts are covered then we can expect long unwinding. One think is sure that we can expect 100 points trading range for today.

For today’s trading session, 8870 will be a key level to watch. Below 8870 we can expect a move towards 8800 too. On higher side, we can expect stiff resistance at 8940 and 8985 levels. If we get follow up of yesterday’s selling then we can expect 3-4 days sell off. Just take a note that it was more than 800 points rise in one go so even if it got sold by 300 points then also, people will say its profit taking. In reality it is not. It is a toppy formation.

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Strategy for Nifty February future – SGX Nifty is giving hint for weak opening near 8930 levels. If this happens then bears may have a good chance of dragging it lower further near 8900 levels. I say not to act for intraday as it is derivative expiry. One can expect resistance at 9000 levels. Let us see what we get.

S&P 500 (USA) – I have already said that direction is in bear’s hand now and a move is likely towards 1990 to 1980 levels. We saw close near 2000 levels. Do you now that S&P has again broken 100 DMA which is at 2010 levels. It has 200 DMA at 1972 levels. So, all crucial moving averages are coming closer in this more than two month’s consolidation. Every bounce got sold near to or above 2050 levels. This is itself a bearish formation. It is matter to time to see a break below 1972 Sooner or later, this is supposed to happen.