Friday, February 17, 2017
Wednesday, February 15, 2017
Tata Motors shown serious capitulation in less than 2 trading hours and so did Bank of Baroda. Even when Nifty has been in a range these stocks declined sharply providing brilliant trading opportunity.
You can read detailed analysis on Tata Motors cashing the crash!
As per Elliott wave there are many corrective patterns like Flat, Zigzag, Triangle, Double correction, Triple correction and Complex correction. Understanding the pattern is easy but it is more important to identify the same when pattern is under formation so that next trade can be taken with proper risk reward ratio.
What is Elliott wave Flat correction pattern? This pattern is divided in 3-3-5 which means first 2 legs which is a and b are corrective waves. In this, wave b should retrace more than 61.8% of wave a. Post the completion of wave b, we can expect wave c should start in opposite direction to that of wave b in form of 5 waves i.e impulsive in nature. Bank of Baroda 60 mins chart meets the exact criteria. The below research is taken from “The Financial Waves Short Term Update” which was published on 14th February 2017
Bank of Baroda 60 mins chart:
(Part of research taken from today’s report i.e 14th February 2016)
“There was strong selling among the PSU banks and despite of Nifty closing in the green territory these stocks were the major laggards in the last trading session. Bank of Baroda was the major loser and it was down by 10.56% exhibiting a free fall from the peak.
Post the lows of 110 levels at the early 2016 this stock is forming a complex correction within the blue upward slopping channel. Wave z of the same was forming a flat correction pattern which now looks to be complete at the recent highs of 190 levels and the next leg has started on downside. As per this scenario using bar technique would be advisable and stay bearish as far as the previous bars high is intact on closing basis.
As shown on 60 mins chart, yesterday there was a Gap down opening at the start of the day and then there was complete domination by the bears over this bank. The entire previous rise was taken out in faster time with a series of red candles. As per wave perspective the complex correction looks to be complete at the recent highs and now the downtrend has started so outlook will remain negative. ….
Elliott wave can help us to place ourselves in the right direction of market with proper risk management strategies. To know the in-depth research on Nifty and 3 stocks on daily basis subscribe to “The Financial Waves Short Term Update” Subscription options
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Tuesday, February 14, 2017
Tata Motors crashed in today’s trading session falling by more than 7% post its result announcement. It is thrilling to see prices behaving exactly as per Elliott wave patterns!
The sharp selloff in Tata motors stock today can be attributed to the extremely poor result announced that showed decline in profits by nearly 96% year on year basis. Such sharp fall in profits which was unexpected will obviously result into some serious weakness in stock prices.
But for a trader what matters most is to see if there was a trade setup that could have helped to capitalize this serious capitulation even before the news or event.
Following was the stock tip on Tata motors which we gave to Equity calls clients on 9th February –
TATA MOTORS FUT SELL AT CMP 508.60 SL 520 TGT 490
TATA MOTORS FUT SELL CALL GIVEN BOOK PART TP AT 501.40 AND TRAIL STOP TO COST
TATA MOTORS FUT SELL CALL GIVEN TARGET ACHIEVED BOOK PROFIT AND EXIT AT CMP 488
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The above call was given based on in-depth research using Technical analysis – Elliott wave and channels.
Now look at the below chart of Tata motors shown today morning equity research report – The Financial Waves short term update
Tata Motors 60 mins chart: Anticipated today morning before equity markets opened.
Tata Motors 60 mins chart – Happened today
Elliott Wave analysis:
Below is the research published today morning before equity markets opened that showed detailed pattern analysis and Elliott wave counts on Tata Motors
The daily chart shows (shown in actual research report) that from October 2016 intermediate wave (Y) is ongoing in form of Flat correction pattern. Currently minor wave c of the same is ongoing which has managed to breach the moving average line thereby keeping the daily bias negative.
As shown in 60 min chart, post breaching the blue channel support and the Head & Shoulder neckline prices are struggling to generate momentum on either side. As per wave perspective minor wave c of flat correction pattern is ongoing but we can see that since last 2 sessions the previous low is intact which is concerning. Now from near term perspective move below 499 will resume the downtrend for the target of 485 or lower.
In short, for Tata Motors outlook will be negative as far as prices remain below the neckline. On downside move below the previous low should infuse selling pressure and push prices towards 485 levels.
The above research only highlights the fact that using Advanced concepts of Technical analysis – Elliott waves we are exploiting the probability to be in our favor.
Want to learn these techniques? Attend the most advanced training on Technical analysis – Neo wave, Elliott wave and Time cycles scheduled on 18th and 19th March 2017. News or events does not always help in taking a correct trade but it is best to look at the ongoing patterns and have a trading strategy in place even before the news or results are announced. Learn More
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Monday, February 13, 2017
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Wednesday, February 8, 2017
RBI maintained status quo on key policy rates and kept repo rate unchanged at 6.25%. Nifty movement post the policy has been precisely as expected as per Zigzag pattern.
New RBI governor – Urjit Patel continues to surprise the street by continuing the unpredictability seen during the tenure of Mr. Rajan. In an interview today on ET Now I distinctly mentioned to accommodate for surprises during final hour of trading. Following is a brief transcript of the interview:
ET Now interview transcript:
Q: What should be the trading strategy on major index today given the macroeconomic policy later in the day?
A: It is better to adopt buy on dips strategy on Nifty rather than buying at current levels as prices are moving in complex pattern. Any dips towards the level of 8715 – 8720 can be used as buying opportunity with 8685 as stop and then expecting a target near 8800 levels over short term. This is based on the fact that after the strong bar formation on Budget day Nifty has been showing smaller bar sizes and some loss of momentum so during such scenarios and given the pattern analysis buying on dips is better strategy to adopt.
Now look at the below research which helped us to adopt the above trading strategy. This was published today morning in “The Financial Waves short term update” – daily equity research report
Nifty 60 mins chart: (shown in morning of 8th Feb 2017)
Wave analysis: published in morning on 8th February 2017
… Market reaction and close today post the RBI meet is going to be important. It is expected that there can be 25 bps rate cut in the policy meet but that is not necessary. RBI new governor is also known for surprises so we will wait to hear from him (It seems new RBI governor is following the path of Mr. Rajan to keep surprising)
We are showing Hourly Bollinger bands® as there is possibility of some consolidation. The support as per this is now near 8710 level on downside and the resistance is near ……... So a decisive move above or below this indicator is required to confirm the short term trend. As per wave pattern, we are now in wave iii within Ending diagonal. Move towards 8710 – 8720 (Nifty made a low of 8715 precisely at average of support given by us) will indicate wave iv ongoing post which we should see one more push on upside in the form of minute wave v which will complete wave ………. of Zigzag pattern. So range bound trading strategy might work well over short term.………………. Let us see if prices are contained within this range today even post RBI meet or gives a decisive breakout. Else buying near support and selling near resistance should work well for now!
Happened: Nifty made a low at 8715 which was exactly within the zone as expected and bounced back sharply from there. As soon as Nifty formed minor positive hourly bar we gave buy recommendations to our Stock and Nifty tips clients with partial profits booked to lock to make it risk free.
Now the entire strategy has been developed by understanding the pattern – Ending Diagonal as per Neo wave – Advanced Elliott wave. If we know where we stand on the path we have the address for the market and the road map ahead. It is all about probability! Irrespective of the news or event price movement has been very accurate so knowing the Elliott wave pattern is the key to trade successfully keeping the crucial stoploss in place in case lower probable scenario plays out.
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