Fractal Nature in simple terms is nothing but a mirror effect between asset classes at different time scale.
Fundamental rule of Technical analysis is Fractal Nature. In whichever place in the world people will go, Human behavior doesn’t change. i.e – whether one goes to US or India or anywhere else, each and every person looks happy in good mood and vice versa. In panic situation too, people reacts in very predictable manner.
Freely traded markets reflect all this emotions. i.e- stock market. One can analyze the social mood while just looking at the charts. Stock markets always lead the crowd and past Human prints will guide for what can happen in future. One can analyze the same through understanding patterns and other techniques. All the social media and the News shows what has happened in the past and one of the Fundamental point of market behavior is that it always discounts the past and look for the future. Price is supreme element for any asset class because it simply suggest us the value in real terms in real time.
Maruti Weekly chart:
Tata Motors 60 mins chart:
Above we have shown Maruti and Tata motors which exhibits the same structure. We can see that, time frame of Maruti is on weekly chart whereas time frame of Tata motors is on Hourly scale. Now, look at the patterns, both of this looks very similar. After completion of this pattern, Marutihas showed sharp up move and currently trading at lifetime highs. So, what can be post effect of this pattern in Tata Motors. To know the short to medium term trend along with important level, subscribe to “The Financial Waves Short Term Update”which includes Nifty and 3 stocks. For more information, visit http://www.wavesstrategy.com/index.php/store.html