Wednesday, July 31, 2013

Indian equity stealth bear market continues with Nifty not reflecting true picture

Bottom Line: Nifty reacted sharply lower even when RBI kept policy rates unchanged. The trend continues to be down!

Nifty daily chart:



Nifty 60 mins chart:
Nifty 10 mins chart:

Wave Analysis:

In previous update we mentioned that “As we have mentioned before the target for wedge pattern comes near 5810 from where it has started and 5750 is where we think this wave d of wave (e) in triangle should atleast touch.”

Nifty moved down exactly as expected. Prices made a low of 5748 and closed near the lower end of the day. After RBI announced that the rates are kept unchanged there was minor upside reaction towards 5860 levels and prices turned down from there. The selloff continued throughout the day with no bounce back. Also the selloff was not in form of a spike but gradual throughout the day. Midcap and Smallcap indices continued to bleed and there is some serious carnage in widely followed stocks that people prefer buying on dips. We again re-iterate that current market is conducive for traders and hostile for investors. The trend changes every 1 week and majority of the stocks are moving down.

USDINR showed sharp depreciation against major currencies simply reflects that RBI interventions had no meaning. Trying to find out fundamental reasons for such movement is everyone’s guess. But from technical perspective the move up from 54 to 61 was impulsive in nature and since then USDINR is moving in overlapping corrective fashion within a range. It is too soon to say if that correction is over and the trend on upside has resumed but if 62 level is crossed then we can see some serious currency crisis.

The advanced decline ratio deteriorated drastically with 681 advancing against 1590 declining. Such extreme values are seen either before serious capitulation or just before reversals when everyone turns bearish and market reverses on upside. We have seen over past 3 months that such extreme values resulted reversals but we would not suggest catching a bottom here. 5845 – 5860 can be now used as ideal stoploss for short positions and only a move above these levels will indicate that short term bottom is in place.

Nifty 60 mins chart shows that prices are moving in a downward sloping red channel and yesterday’s high was also exactly on the channel from where prices reversed. We are showing Nifty 10 mins chart as well to understand if the internal wave counts are corrective or impulsive. As shown we do not see 5 waves but complex corrective on downside with prices in 2nd corrective pattern. Yesterday’s selloff broke even the lower trendline of blue channel. At 5720 first correction w is equal to second correction y. This double correction can also develop into a triple correction. Only a faster retracement of the previous leg will indicate that the short term low is in place. Till that happens it is better to position in the direction of trend which is currently down.

In short, our bias continues to be negative as long as 5845 is intact on upside. Prices are now near the Gap area of 5700 to 5750. If prices sustains below 5750 we can then expect this Gap to be filled.

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Monday, July 29, 2013

Gold has ended secular bull trend and its affinity for Prime numbers!

A prime number (or a prime) is a natural number greater than 1 that has no positive divisors other than 1 and itself.  Fibonacci number, Prime numbers, a few Geometric degrees or angles all play vital role in providing important information for freely traded markets. We have to see which of the series are well respected. Gold undoubtedly shows its affinity for “Prime Numbers”
The following is published in “The Financial Waves Monthly Update” that gives multiyear target for Gold with clear justification of why we think Gold has started multi-year and probably multi-decadeof downtrend. A small excerpt from the same report is as follows:
Gold has been one of the favorite investment vehicles for over a decade. Prices have increased multifold from $272.22 in 2002 to near 1700 levels (monthly average for the year) or $1920 actual high in just a decade. This is astonishing 7 times or 524% returns in 11 years. People tend to flock to the asset class that has been in a secular bull trend. This is a good strategy but the problem is that when this secular tend ends the next leg of bear market is not acceptable to many investors since they have not seen Gold underperforming during their investment career or probably refuse to accept the fact that it can underperform other asset classes.
Gold spot USD yearly (monthly average) chart:
(Actual chart has many more studies like Time Cycles, Projections, Levels, Elliott Wave counts and ideal chart)
Gold love for Prime numbers: We can see multiple relationships in terms of Price and Time. Gold moved in controlled fashion prior to 1968 and so we can see prices constant at $35 for 33 years. Even in a controlled fashion the time for Cycle…. is 33 years which is 11*3 both of which are prime numbers. The rally then took prices towards $612.56 i.e. An increase of 17 times in 13 years, both of which is again prime number. Next Cycle …. lasted for 21 years which is 7*3 both again prime numbers. Cycle ….started from 272.22 and made a monthly average high of 1700 in 2012 or actual high of 1920 in 2011. Considering actual highs prices increased by 7 times in 11 years (both again prime)
The above is sufficient data to assume Gold movement is driven by Prime numbers. The future forecast is also coming exactly as per this number. We do not have justification for Gold’s affinity to Prime but what we know is that if it worked in past it will work in future as well which has helped us to come out with Gold Price & Time targets!
To know the next move of Gold for long term levels subscribe to the Monthly update. For more information visit: http://www.wavesstrategy.com/index.php/store.html or write to us at helpdesk@wavesstrategy.com

Thursday, July 25, 2013

Bank Nifty and USDINR - Medium to long term outlook using Elliott wave

By Waves Strategy Advisors, For various research products visit http://www.wavesstrategy.com/index.php/store.html or write to helpdesk@wavesstrategy.com
On Bank Nifty, the level of 25,000 & 40,000 might sound irrational or crazy at this point of time. But history shows that things that seem far of reach are still plausible if you apply objective techniques. The below chart itself shows that in 2002 Bank Nifty was trading at 900 levels and by end of 2007 it quoted at 10,000 levels. This is the power a Bull trend. Bank Nifty increased multifold from 900 to 10,000 i.e. more than 10 times in 6 years. In 2002 when index was at 900 if someone would have predicted 10,000 people would have rejected that on the face and would have used the word “Crazy”. But history of world markets let alone India has from time again showed power that Bull trend has.
In 2009 March Bank Nifty was near 3400 level and by November 2010 the index touched 13300levels i.e. a rise of almost 4 times in less than 2 years.
The following is published in “The Financial Waves Monthly Update” that gives multiyear target for Bank Nifty with clear justification of why we think it is plausible.
Bank Nifty has been forming very similar structure to that of Nifty. The rally in Bank Nifty started in 2001 and it was leading the Nifty rally which actually started in 2003. As shown in Figure 4, channels are working very well on multiyear time frame. Prices are now in yearlong consolidation since top was made in 2008.
Figure 4: Bank Nifty Weekly chart
(Actual chart has many more studies like Time Cycles, Projections, Levels, Elliott Wave counts)
We do not expect this rally to start now as there is more time left for the correction. We again re-iterate that the current market is not an investment market but a trader’s market. Our daily equity research report Financial Waves Short term update gives short term moves expected on Indian market but for investment perspective one should wait for the current correction to be over which is mentioned clearly in the monthly update.
USDINR Analysis:
Indian currency market has been amidst lot of news lately. The depreciation seen in INR against major currency pairs has put lot of pressure on RBI to take corrective steps in order to stop INRfrom deprecating further. We have been mentioning about the strong uptrend in USDINR when it was due in May 2013 and the pair rallied from 54.50 to near 61 levels as expected. RBI has been intervening in between as well during the uptrend but that only resulted in short term sideways action and the trend remained intact.
Figure 6: USDINR Daily chart spot
The above chart of USDINR clearly shows why prices are failing to move above 61 levels. It is not necessarily due to RBI intervention but the trend was due to turn. Government actions produce short term spikes or movement but original trend eventually resumes. To know the future ofUSDINR look at either short term Forex report or for long term levels subscribe to the Monthly update.
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Tips on stocks Zee Business by Ashish Kyal Waves Strategy Advisors 20130725



Tips on stocks - Rpower Zee Business by Ashish Kyal Waves Strategy Advisors. For more information on various research products visit www.wavesstrategy.com

Wednesday, July 24, 2013

Sensex to start next BULL TREND before end of 2014 for multiyear target of 61000!

Sensex to start next BULL TREND before end of 2014 for multiyear target of 61000 “The Monthly Financial Waves” is a monthly publication that shows the long term charts using Time Cycles, Elliott wave analysis, Channels, Price ROC, Time analysis to give an overall perspective and the path Indian markets should follow in this decade. In addition to Sensex the research gives perspective on what is expected in Gold and why it will be no longer a safe heaven atleast for a decade. Banking sector is one  major driving force for any economic sustainability. It is therefore imperative to see where the Banking index will move when the next bull trend starts!
US markets have hit life time highs in 2013DJIA is forming a very long expanding triangle pattern since 2000 onwards and many would have been surprised to see US markets hitting life time highs but this was expected since the pattern is very clear. Prices have now approached crucial juncture and cluster of resistances are acting simultaneously. The monthly report gives the probable path US markets will follow.
The below chart of Sensex communicate many things. It will make a lot more sense when you will see cycle degree Elliott wave labeling with multi-month Time cycle analyses that shows by when we expect Sensex to see 61000 levels
Sensex weekly line chart:
Forex or Currency market has been gaining lot of focus lately after USDINR depreciated from 55 to 61 levels. We have been bullish before everyone started talking about the move. The up move in currency is yet over from medium term perspective. You can view what is happening with USDINRsince past many years and what we expect in future!
Gold has been one of the favorites over past decade. But Indian love for Gold should end soon with the start of decade long Gold bear market. The monthly research also gives an overview on why Gold should be avoided as investment atleast for next 10 years!
Subscribe monthly research report “The Financial Waves Monthly update” and get access from medium to long term analysis on SensexBank NiftyUS markets – DJIAUSDINR and Gold. To subscribe visit http://www.wavesstrategy.com/index.php/store.html

Tuesday, July 23, 2013

EURINR - Trading Currency / Forex markets using Elliott wave

EURINR - Trading Currency / Forex markets using Elliott wave...
By Waves Strategy Advisors, for more information on various research products visit: http://www.wavesstrategy.com/index.php/store.html
Trading Impulsive waves can result into multifold profits but after the end of Impulsive wave pattern corrective leg can be equally complex and markets will ensure to take away the profits made during an impulsive move. Elliott wave helps to understand if markets are moving in trending or corrective mode. For any trader it is important to capture the trend and trade cautiously when a good trend ends.
Below is the excerpt from currency research report “The Forex Waves” that shows a clear example of impulsive up move in EURINR from near 70 levels to highs of 79.50 in just 2 months period. Our readers have been bullish all the way and we have accordingly cautioned them when 5 waves on upside was complete and the downside correction of this up move started.
EURINR 60 mins chart: 
The above chart clearly shows why it is important to trade the trend! But a trending move last only for 20% to 30% of the times and rest all time market moves in correction mode. So it becomes equally important to analyze the corrective movements so that one can have a setup ready near the end of correction and capture for probable start of next trending move…
To know what we expect next in USDINREURINRGBPINRJPYINR subscribe to “The ForexWaves”. To know about various research products and subscription visit http://www.wavesstrategy.com/index.php/store.html

Monday, July 22, 2013

View on Sensex by Ashish Kyal in the Economic Times section of Navbharat times

Read below for English transcript: 

Sensex has to cross above 20400 to maintain upside momentum!
Indian equity market – Sensex has arrived near the high levels of 20200 previously seen in January and then in May 2013. This time the up move since June from 18500 levels has been not broad based. The performance has been divided between sectors. A few stocks from IT, FMCG,Pharma sectors are making life time highs whereas stocks in Banking, Metals, Infra sectors are making new 52 week’s low. This is the reason why we say that the current rally is loft sided and lacks conviction.
BSE Midcap index is down by nearly 19% from the high it made in January 2013 and BSE Smallcapindex is down by nearly 25% from its January highs. This itself shows that even if Sensex has reached near its previous 2013 highs the broader market has not shown any signs of improvement. This is one sign suggesting that the rally might not be sustainable.
By using technique of economic cycle analysis we think by mid of 2014 Indian equity markets will form significant bottom and we should see good rally lasting for atleast few years. The current market is a trader’s market and after 2014 we should have investor’s market.
Past week has created more confusion among traders and investors. With RBI action on Monday evening announcing a slew of measures like raising cost of borrowing by banks by 2% to 10.25% to control the slide in Rupee resulted in sharp selloff in equity markets next day. Also Rupee did not appreciate much as expected. However, later during the week FDI reform announcement by government, better than expected results by index heavy weights like TCS, price hike by FMCG major - HUL drove the overall index higher on weekly basis.
For coming week, on technical perspective we think 20200 to 20400 is strong resistance zone for Sensex. Prices have turned from near these levels for 3 times in 2013 itself and for upside momentum to be intact 20400 has to be broken. On downside 19650 is very important support which is also the low created after RBI announcement.
For the rally to continue in this week it will be important that Banking stocks and interest sensitive sectors start showing some performance on upside. Also why we think there is high chance of range bound movement between 19700 and 20300 this week is that there are many beaten down sectors that are oversold and can start consolidating or show some upside pullback and on other hand the strong momentum sectors is due for some downside correction. This will ultimately lead to overall index to move in a range.
In short, if market has to maintain the upside momentum it has to cross above 20400 levels else we can expect range bound movement between the levels mentioned in this week. 
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Friday, July 19, 2013

Nifty / USDINR - Does news / events drive Stock & Currency markets?

By Waves Strategy Advisors, For more information on daily research reports, write to us at helpdesk@wavesstrategy.com or visit www.wavesstrategy.com

The Financial Express: “The Reserve Bank on Monday evening announced a slew of measures like raising cost of borrowing by banks by 2 per cent to 10.25 per cent and announcing sale of bonds worth Rs 12,000 crore through open market operations to suck liquidity to check rupee slide.”
                                 
RBI’s sudden action in order to check Rupee slide looks to be more of an impulsive action resulting Rupee to appreciate to a level just seen 2 trading day’s back i.e. on 11th July itself we can see a low of 59.38 and yesterday Rupee closed near this level only. The desperate step taken by central bank does not look to be of much use for USDINR. Indian currency after sharp depreciation has already been appreciating from 61 levels. The action looks to be contradicting the previous stand where RBI has reduced repo rate since Jan 2013 except for last time. History shows that Government’s action only extends the problem rather than solving it. In short, USDINR trend has been down from 61 levels since 8th July and we have been expecting 58 to 57 levels for this downside correction. Indian markets reacted sharply lower and had a Gap down opening of almost 100 points near 5930 levels.

Nifty 60 mins chart:


In today’s morning equity research report “The Financial Waves STU” we mentioned that:

Nifty stayed below 6000 level during major part of the day but during final hour of trading managed to sustain above 6000 and closed near day’s high at 6040. As previously expected the 2 days correction on downside was only wave x and prices have now started the next minor leg on upside in the form of wave a of second correction.

Food for thought is that RBI action produced short term spike on downside that lasted for 2 days and prices are now at level where it closed prior to RBI event. Also USDINR is at the level where it was before. The entire activity by central bank looks to be of no use but only increased short term volatility making it more challenging for a trader or investor. This is exactly the reason why we say that event can produce short term spikes or reaction that can last for few mins or few days or few weeks and eventually the original trend resumes! In the entire fall of 2008 government worldwide constantly took steps to avoid the selloff by banning short selling, reducing interest rates and finally giving QE1. Each of the action produced few days of upside reversal but the trend resumed on downside. The change in trend happened only when it was due and then the credit was given to FED that failed miserably when DJIA (US) moved from 14000 to 6500. Similarly Japanese central bank has been intervening many times to depreciate Yen for more than 2 decades but it only increased short term volatility and USDJPY continued its downtrend with only intermittent uptrend.


The only objective tool that helps us to trade systematically is using Elliott Wave theory. Reacting on news is simply trading randomly. If stock market worked on simple logics then making money would not have been difficult. Subscribe to “The Financial Waves STU” and get insight into how simple channels are also working very well along with Elliott wave technique to get the direction of markets.

By Waves Strategy Advisors, For more information on daily research reports, write to us at helpdesk@wavesstrategy.com or visit www.wavesstrategy.com

Wednesday, July 17, 2013

Ashish Kyal of Waves Strategy Advisors on Zee Business Tips on stocks 20130717



Ashish Kyal of Waves Strategy Advisors on Zee Business Tips on stocks like Idea, ITC and investment strategy. For more information visit www.wavesstrategy.com or to subscribe to daily intraday / positional advisory along with Elliott wave counts.

Nifty reaction to RBI action and Elliott wave structure

The following research is published on daily basis by Waves Strategy Advisors. To subscribe to daily research report "The Financial Waves" write to helpdesk@wavesstrategy.com or visit www.wavesstrategy.com

Bottom Line: Nifty reacted sharply lower yesterday on back of RBI action on Monday evening to curb liquidity and check Rupee slide.

Nifty daily chart:

Nifty 60 mins chart:
Wave Analysis:

The Financial Express: “The Reserve Bank on Monday evening announced a slew of measures like raising cost of borrowing by banks by 2 per cent to 10.25 per cent and announcing sale of bonds worth Rs 12,000 crore through open market operations to suck liquidity to check rupee slide.”

RBI’s sudden action in order to check Rupee slide looks to be more of an impulsive action resulting Rupee to appreciate to a level just seen 2 trading day’s back i.e. on 11th July itself we can see a low of 59.38 and yesterday Rupee closed near this level only. The desperate step taken by central bank does not look to be of much use for USDINR. Indian currency after sharp depreciation has already been appreciating from 61 levels. The action looks to be contradicting the previous stand where RBI has reduced repo rate since Jan 2013 except for last time. History shows that Government’s action only extends the problem rather than solving it. In short, USDINR trend has been down from 61 levels since 8th July and we have been expecting 58 to 57 levels for this downside correction.

Indian markets reacted sharply lower and had a Gap down opening of almost 100 points near 5930 levels. Prices consolidated between 5965 and 5910 levels for the rest of the day. The big Gap still remains unfilled on upside but as shown on 60 mins chart the level of 5900 remains protected on downside. Prices however broke the neckline of Head & Shoulder pattern and re-entered into it. In June, we have observed break of 5600 levels on downside resulted into wedge pattern break but prices reversed back and re-entered into this pattern on upside. Currently, Head & Shoulder pattern gave a breakout on upside from 5950 levels but prices reversed and re-entered below the neckline. Such failure of patterns on either side typically indicates triangle or contracting activity. We will not be too bearish on failed pattern since it seems to be occurring within a triangle pattern. On lower degree we have observed that prices have been forming Gaps between 5750 and 5900 levels but filling it the very next day and Gaps carrying no significance. The movement was also between contracting or congestion period and so Gaps did not carry any weightage between 5750 and 5900.

Similarly entire wave (e) since April 2013 from 5500 level is probably forming triangle pattern and prices are currently in wave c of this pattern. A move below 5900 will indicate wave c is over and wave d of triangle has started whereas any move back above 6010 can result into move towards 6100 on upside. We do not completely rule out possibility of 6200 on upside but looking at the internal structure of wave c and recent failure of patterns on either side is increasing very high possibility towards triangle formation in wave (e). Once this wave (e) gets complete one should expect the next bigger degree of downtrend to start.

We do acknowledge the fact that given recent events of pattern failure and sector / stock rotation, trading is extremely challenging. Markets are giving breakouts from important patterns but are failing it again and again. We re-iterate that this happens in consolidation patterns and so Risk management & Money management plays vital role since in triangle all legs are corrective and predictability gradually reduces.

In short, it is now important to observe which direction Nifty breaks. Move back above 6010 can result into positive possibility towards 6100 whereas any move below 5900 can take prices back towards 5750 levels.

The following research is published on daily basis by Waves Strategy Advisors. To subscribe to daily research report "The Financial Waves" write to helpdesk@wavesstrategy.com or visit www.wavesstrategy.com


Tuesday, July 16, 2013

Indian Equity: Concept of rotational trend!

The below article highlights why trading equity has been challenging even though Nifty has moved up from 5600 and made a high of 6030 on  15th July 2013.
The below was published on 15th July 2013 morning research report “The Financial Waves Short term update”
Concept of Rotational rally: The star performer was IT index on Friday and there was no contribution from Smallcap and Midcap sectors. Infact these sectors closed minor negative when the major index was up by more than 1%. A very interesting observation over past 2 weeks is that during the formation of wave i which lasted only about 3 days from 5600 to 5900 there was strong momentum across the board. During the sideways consolidation between 5750 and 5900 that lasted for 7 days many of the individual stocks from high beta sectors and entire ADAG pack showed spectacular performance but blue chip stocks were laggards. The break above 5900 was contributed by Banking and interest sensitive sector to an extent. The rally above 5950 was by IT sector. Each there have been a few sectors that are outperforming and the other sectors moving sideways during that period. This is known as rotational rally on very short term period. During such scenario if a trader is trading a particular sector as soon as the breakout in that sector happens he will be frustrated to see other few sectors rallying except the ones he entered. During such scenario it is better to have bets across different sectors because the current rally is on rotational basis and it is extremely challenging to pick the sectors that will be rallying next.
Nifty 60 mins chart: as of today 12 pm
Many of the stocks like Axis Bank, SBIICICI Bank, HindalcoTatasteelDLFBHELIDBI, Tata Motors have formed very good consolidation patterns with….………but on the other hand stocks like InfosysRelcapRpowerRCOM, Reliance Industries are in momentum on upside but exhibiting negative divergences to some extent. Elliott wave also helps to evaluate the stocks.
Please beware that there is no price confirmation yet and secondary indicators are suggesting underperformers can start outperforming and outperformers can now underperform. Positions should be taken only on breakout of important resistance levels on upside in underperforming stocks.
To  know more about daily research report “The Financial Waves Short term update” write to us at helpdesk@wavesstrategy.com or visit www.wavesstrategy.com

Monday, July 15, 2013

Zee Business: Tips on Stocks SBI, HCL Tech by Ashish Kyal of Waves Strategy Advisors



Zee Business: Tips on Stocks like SBI, HCL Tech by Ashish Kyal of Waves Strategy Advisors. For more information to subscribe daily research and advisory services visit www.wavesstrategy.com

Friday, July 12, 2013

Infosys results: Up by more than 13% But exactly within the range!

By Waves Strategy Advisors, For more information visit www.wavesstrategy.com
Today we had Q1 2013 results of Indian IT bellwether- Infosys. 
Company has reported better-than-expected 4 percent year-on-year rise.In first quarter consolidated net profit at Rs 2,374 crore, helped by new deal wins. The company also maintained its earlier US Dollar revenue growth guidance for FY14.
In the opening trade, Infosys shares rose more than 13% and currently trading near 2776 onNSE. In today’s Equity report – The Financial Waves STU we have covered this stock in morning before results were announced and shown completion of 5 wave structure on downside and expected an up move. This stock is having a weightage of approx 7.33% on index as of now & so it has contributed a rise in Nifty today.
Below we have shown 120 mins chart of Infosys pricked up from the equity report
Infosys 120 mins chart:
Published today before market opened:
Infosys 120 mins chart after result announced, currently quoting near 2795
Infosys weekly chart:
Wave Analysis:
In morning before results were declared we mentioned the following:
As seen above in weekly chart of Infosys, since 2011 prices are moving in the big range of 2050-3000 levels. In last two years (2011-2012) whenever company has declared the quarterly results we have observed gap up or gap down opening and prices moved violently. Even in this aggressive moves prices managed to protect 2050 and 3000 levels on downside and upside respectively. This signifies the importance of both these levels. If results drive the stock prices then why is it contained only within this range to the point? The stock has witnessed Gap up and Gap down moves of anywhere between 7% and 20% but this range has worked brilliantly so far.
Today we have Q1 2013 results of Infosys and every one may be expecting gap up or gap down move in this stock. Technically, prices managed to protect the strong support of 2050 and turned on upside for 3rd time (shown by blue symbol). This indicates probably an up move in today’s trading session….. But if results are below expectations then there can be a spike towards 2050 and this level should be well respected we think.
As shown in 120 mins chart, prices are moving higher in the small blue channel and retraced almost 50% of wave C. At present, prices are moving near the immediate resistance of 2600. A move above 2600 will open up the further positive possibilities…..
In short, move above 2600 will continue the uptrend and prices can move higher towards 2750/2800 levels. Infosys is currently quoting at “2795”
There is more in depth analysis of Infosys in “The Financial Waves Short term update”research report published on daily basis.
Do not wait for outcome of an event to take trading decisions. Think objectively and catch the trend before it is over. This is only the one chart which is shown above. Equity research report also covers Nifty and 3 stocks. Charges for this equity research is INR 2000 and the subscription can be done directly from http://wavesstrategy.com/payment. For more information write to us at helpdesk@wavesstrategy.com or call on +912228831358 / +91 22 9920422202

Thursday, July 11, 2013

Nifty: Elliott wave and Time perspective…

By Waves Strategy Advisors, For more information visit www.wavesstrategy.com
Price action over past 7 days might be frustrating for many of the traders as Nifty has been moving within the range of 5750 and 5900 but with Gaps. However we have been constantly mentioning the important support and resistance levels along with the Time frame the current corrective action can take since 4th July 2013 onwards.  
On 4th July 2013, we mentioned that Wave i took 3 days from 5600 to 5900. Currently, prices are moving down in the form of wave ii and has taken 2 days so far but retraced only 38.2% of up move. This Time analysis suggests that the medium term trend remains positive. As wave i have taken 3 days we can expect wave ii to last for 3 to 9 days. Wave ii has already taken 2 days…….”
Nifty 60 mins chart: As shown on 4th July 2013 
As of today 11th July 2013:
On 10th July morning we have mentioned that “Over past 5 trading sessions Nifty shows Gapping action on 4 days and each of these Gaps have been in opposite direction compared to the immediately preceding Gap. In this entire process the range of the market has been between 5760 and 5900. This is enough to explain that despite of Gaps of 30 – 40 points there is no net progress. Such actions are sufficient for frustrating many traders who will probably now refrain from creating any positions. This is a typical behavior that a contracting market activity produces and just before the trend starts majority of the traders will give up on markets.”
In today’s morning report before market opened following was published “Prices are constantly testing 5900 levels on upside. The more number of times a level is tested the more chances for it to get broken. Also important supports or resistances are usually taken out with Gaps. It will be important to see if even this time the same thing happens. Also big Gaps do not provide opportunity for traders on sidelines to enter but aggressive traders can………
Time perspective:The up move from 5600 to 5900 was only 3 days affair and to maintain the degree balance the current corrective move can last for 9 days. So we have maximum of 2 more days of correction possible. We think Nifty should start an upmove either today or by tomorrow.Timewise the correction is approximately 2.5 * wave i and we have seen before that normally wave ii is around 2.5 to 2.618 times wave i from Time perspective.
……..as mentioned before the activity of October 2011 was very similar and the consolidation area was taken out with a big Gap up. Similar behaviour can be expected if markets are indeed Fractal!”
We have been very accurate in mentioning the range of 5900 to 5750 from the very day correction started and market has taken out 5900 today itself and that too with a GAP.
There is more indepth analysis of Indian markets in “The Financial Waves Short term update”research reportpublished on daily basis. Charges for this equity research is INR 2000 and the subscription can be done directly from http://wavesstrategy.com/payment For more information write to us at helpdesk@wavesstrategy.com or call on +91 22 28831358 / +91 22 9920422202