Wednesday, January 8, 2014

Sensex forecasting using BAR techniques on monthly charts!

How to forecast using simple BAR techniques applied on monthly charts?
Sensex touched new life time highs in the month of December 2013. However the new high was not supported by momentum. Also the Cash volumes have reached its lowest volumes since 2008 onwards indicating that the correction is still ongoing.
During such times there is confusion in understanding the clear trend of the market. A very simple technique can be using bar technique and looking at the strength of the each monthly bar.
The below chart is shown in “The Financial Waves Monthly update” – showing medium to long term forecast for Sensex with detailed Elliott wave counts, Patterns, Bar Techniques, Price to Time ratio, etc. 
Figure 1: Sensex Monthly chart
The above chart of Sensex gives some important statistical information. Since 2008 onwards the down move has approximately taken ……… months whereas up move has taken …….. months. However, even if the time consumed has been increasing, the range of price movement has constantly reduced. To get more clarity on this it is better to take Price to Time ratio. This ratio has reduced from ………..(considering current high of 21483). Such systematic reduction in price to time value is normally an indication ……….
The monthly bar size has been constantly reducing since the lows of 17448 to the current high 21480. A breakout on upside should have been associated with increase in bar size rather than reduction which means that ………….
In a nutshell, looking at loss of momentum at higher levels and the shorter term wave counts it seems that prices can come back towards …………..
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