504 Gateway Time-out nginx/1.4.6 (Ubuntu) in Node.js and nginx

I am testing a sample node app using nginx.

But I get 504 Gateway Time-out. nginx/1.4.6 (Ubuntu 14.04)

Below is the procedure which I followed for installing node, nginx on Azure.

curl -sL https://deb.nodesource.com/setup_6.x | sudo -E bash -
sudo apt-get install -y nodejs
sudo apt-get install -y build-essential
curl -Lo hello.js http://do.co/node-hello
sudo nano app.js

app.js file

var http = require('http');
http.createServer(function (req, res) {
  console.log('Came here');
  res.writeHead(200, {'Content-Type': 'text/plain'});
  res.end('Hello World\n');
}).listen(8080, 'localhost');
console.log('Server running at http://localhost:8080/');


ls -l
-rwxrwxrwx 1 root root 265 Mar 12 15:52 app.js

sudo npm install pm2 -g
pm2 startup
sudo env PATH=$PATH:/usr/bin /usr/lib/node_modules/pm2/bin/pm2 startup upstart -u azureuser --hp /home/azureuser

pm2 start app.js


Nginx Server
sudo apt-get update
sudo apt-get install nginx
sudo nano /etc/nginx/sites-available/default

sudo nano /etc/nginx/sites-available/default file

server {
    listen 80 default_server;
    listen [::]:80 default_server ipv6only=on;

    root /usr/share/nginx/html;
    index index.html index.htm; 

    server_name testingnode.cloudapp.net;

    location / {
        proxy_pass http://13.65.148.35:8080;
        proxy_http_version 1.1;
        proxy_set_header Upgrade $http_upgrade;
        proxy_set_header Connection 'upgrade';
        proxy_set_header Host $host;
        proxy_cache_bypass $http_upgrade;
    }
}

sudo service nginx restart

http port 80 is opened in azure dashboard

So after all configurations trying to run http://13.65.148.35/ or testingnode.cloudapp.net will give 504 timeout.

Please let me if anything needs to be configured for running node with nginx.

via Sharath