21 July 2015: Nifty Elliott wave analysis: Will a short covering rise come before the end of this up turn? It should but market is on tiring mode. Support – 8550 | Resistance - 8640

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For 21 July 2015: -

On 20 July 2015, FII Bought INR – 714.40 crs and DII Sold INR 848.76 crs

Nifty is looking tired after six-seven days of rally. Only good part is that it has closed above 8600 levels. Bulls are giving their best efforts. Based on charts, I can say that, after a consolidation it will again try to a make a move towards 8800 levels.

There is no strong sell signal but we may expect consolidation now. For higher momentum to continue we need to see Nifty settling above 8640 levels. Can it give this breakout? I can say that it has potential. Somehow, monsoon progress is good in India which is against the IMD forecast. After a long time, I am focusing on some parliamentary development. I heard that some crucial bill may be tabled soon. Let us see.

For today’s trading session, I am expecting a flat start.  We may see this going choppy for today also. I may be interested to trade only if it can generate some euphoric momentum above 8640. Take a note that we have only support at 8550 levels. I still expect a day or two for some short covering rise before expiry. Generally unidirectional rally used to give a short covering rise before end.

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Strategy for Nifty July future – It is going to be difficult to trade if it goes choppy. We got a rise yesterday in second half. One can expect similar trading behaviour for today also. We tried long yesterday @ 8585 and then booked half at 8640 levels. We still have half quantity with us now. If it does not extend above 8660 then I may have a plan to exit now.

S&P 500 (USA) – It came near to 2135 and now turning silent again. This is just one sided bounce from 2045 levels. We are again on critical point. Big question is will it cross 2135? This is something which is beyond speculation. Trading technical support will come at 2115 levels. Time chart suggest that we should avoid this index from now. If it crosses above 2135 then only we can take this in to consideration. I am still on my view that US market is under major top formation.