POSSIBLE ELLIOTT WAVE DIRECTION ON NIFTY

NIFTY LATEST PATTERN

S&P CNX NIFTY is trending down for 5 days or in other words , the stock is daily closing at a lower price than previous days close and closed today below 200 day moving average and 61.8% retracement level. Any more closing below 200 and 61.8% level may create speed fall towards 5630. Industrial output growth crawls at 2% in April. Today's high and low will provide further short term direction. A gapup opening above today's high can be bullish but chances are very low. 275 stocks traded today below 50 day moving averages. 61 stocks in BSE 500 index touch 52-week low;Nifty and BSE 500 indices trading below 200 daily moving average. Nifty 5800 call added 2080350 fresh contracts today indicating huge call writing has happen today. Yesterday 5800 call added 1367900 contracts. Total 3448250 contracts added in open interest in last two days, indicating 5800 level will create big obstacle for bulls. Now lets see what happened in today's trade. FIIs sold first time in 4 digit figure in cash market in 2013. Nifty tried to cross 5790 level but failed again and again and closed below 200 level, indicating more pain is due in our market. Nifty weekly chart confirming rising wage pattern. Break below lower trend line of falling wage will create strong bearish momentum. Head and shoulder pattern attracting nifty towards 5600 level.

 

NIFTY SLIDING TOWARDS 5600

 
Nifty took stop at 200 days moving average 5781. Not a good close for bulls today.
Any two consecutive close below 5781 will drag nifty directly up to lower trend line as drawn in chart below. In our earlier post we wrote about this possible pattern which is shown in the chart below. FIIs exited from all long position in index future till yesterday and today fresh short position made. They sold index future worth Rs.1857.98 crores and open interest increased by 11.5% indicating huge fresh short position created today. FIIs sold such huge amount in a single day first time in 2013. Highly bearish day expected ahead. Nifty may slide up to 5600. Below 5600 Blood Bath.

Just see the weekly chart of Nifty below, since 2012 prices were facing the strong resistance of the multiyear upward sloping trend line and moved lower two times. In last month of May 2013 prices have found resistance of the same trend line for third time and turned on downside as shown in the chart below. Momentum indicator RSI showing the strong negative divergence indicating strong down trend ahead. If RSI break below blue trend line as drawn on RSI as lower trend line, we will see fast downtrend.
We are seeing head and shoulder pattern also on hourly chart which neck line has already broken and predicting target 5477. As long as 5931 is protected no body can stop nifty to fall upto 5600 level.
Nifty 5800 call option added 1367900 fresh contracts in open interest indicating 5800 call has been written today indicating nifty will face resistance above 5800 for tomorrow session.
Join nifty Eyes Trading Club and learn and enjoy profits Click on chart for its larger view.

 

NIFTY UPDATE FOR 11 JUNE

 The rupee hit a record low against the dollar on Monday, escalating worries about the country's current account deficit and complicating the task for policy makers looking to revive an economy that grew at its slowest in a decade in 2012/13. The finance ministry's chief economic adviser Raghuram Rajan said the rupee's fall was a temporary phenomenon, echoing comments from government leaders, and added the administration was taking measures to tackle the imbalance in the current account. While analysts agree that the rupee has run into a broader dollar rally that is also pressuring other emerging currencies such as the Indonesian rupiah, India's currency is seen as more vulnerable due to the country's high fiscal and current account deficits.

A weaker currency could undermine recent fiscal and economic measures by the government that helped spark a surge in foreign inflows. It also complicates the central bank's campaign to cut interest rates in a country still facing the prospect of losing its investment-grade ratings. "A weak rupee can revive a number of past woes, upset the easing inflation trajectory, raise CAD financing concerns and up the currency risks for offshore borrowers. This might also raise another hurdle for the central bank for cutting rates," said Radhika Rao, an economist with DBS Bank in Singapore. The Reserve Bank of India is next due to review monetary policy on June 17, and many economists and traders expect it to pause in its monetary easing after cutting rates by 25 basis points in each of its past three meetings.

The rupee fell to a record low of 58.17 on Monday, according to the latest available Thomson Reuters data, as the dollar gained on data showing China's economy losing momentum and after a reasonably healthy pace of U.S. job creation renewed expectations the Federal Reserve might curb its asset purchases later this year. The Indian currency is running neck to neck with the Korean won as the worst performer among emerging Asian currencies in the year to date. The tumble comes as the Indian economy appears to have better momentum than it did exactly a year ago when the rupee last hit a record low, but still faces a long road to recovery. The most immediate risk centres around financing the current account deficit. That measure had been expected to have narrowed this year from a record 6.7 percent of gross domestic product in the October-December quarter due to falling prices for gold and oil - the country's two biggest imports. Worries over the current account have been exacerbated by foreign investor net sales of more than $2.5 billion in domestic debt over the previous 12 sessions, spurred by concerns that the weaker rupee would erode returns.

Overseas investors have also been spooked by the prospect of an end to the Fed's quantitative easing, while for bond investors, the surge in U.S. Treasury 10-year yields since early May has reduced the yield differential with Indian debt. Finance ministry officials told Reuters the falling rupee was discussed in a previously scheduled meeting on Monday with market regulators and the central bank. "The FII (foreign institutional investors) capital outflows are likely to continue for next 10-15 days," an official said adding the rupee could touch even 59 against the dollar if the outflows continued. Overseas funds are vital to India's economy as a surge in net foreign buying since 2012 - totalling almost $50 billion in both debt and stocks - has been key in financing the deficit. "The current account deficit is large, which needs large amount of capital inflows. The dependence on short-term debt is resulting in the hammering of the rupee," said Sujan Hajra, chief economist at Anand Rathi Securities.

source:- sify finance

 

NIFTY UPDATE

Selling pressure is coming on high level. FIIs are selling index future continuously and Rupees making new high will give pressure in our Market. Midcap and Small cap index closed on negative note for the first time in last five trading sessions. This shows that along with large cap stocks, now mid cap stocks also participated in the fall. Stocks Declining is more than advancing. These all indicate for strong bearish trend is awaiting in our Indian Market. From medium term perspective Elliott wave theory suggested the start of next leg on downside in the broader market. As long as 5990/6000 is intact on upside bears will be upper hand. Any attempt on the upside will provide the bearish opportunity and prices should move lower towards 5850 or even lower. Positional traders may keep sl at 6000 on closing basis for short side.