Thursday, June 26, 2014

Maruti: The Magic of Time Cycles!

Maruti is one of the stocks which we found to follow Time cycles very well. 
We took a step ahead and applied not just 1 cycle to understand important lows but a cluster of cycles together. The 1st chart shown above might look complex at face of it but the below detailed analysis of cycle will provide a simple outlook on why we are bullish on Maruti from short term perspective.
Below is the excerpt from today’s Financial Waves STU which is published before market open to our paid subscribers.
Maruti weekly chart:
Maruti hourly chart:
Cycle Analysis:
Weekly cycle analysis:As shown on weekly chart, the major low was formed in 2009 near 465 levels. From that level we have seen multifold increase in prices and an upmove towards 1737. This up move was then correction for nearly 4 years and a major low was formed not at 910 in early 2012 but at 1215 in mid of 2013. This entire move from low of 465 to the next major low of 1215 is comprised of 1 major cycle which is of 247 weeks. Previously when this major cycle bottomed we saw strong increase in prices and same thing is witnessed even now post September 2013. The next major low should kick in year 2018. So the major trend for Maruti is positive atleast for few more years. However, trading such a big cycle is challenging and we need to observe how smaller cycles are behaving.
Normally a big cycle is either comprised of 2 or 3 shorter term cycles. This concept is known as harmonicity. It is due to cycle synchronization i.e. cycle troughs are formed together and harmonious nature that prediction becomes possible. The low at 1215 is cycle lows of shorter durations as well. We will focus on the short term important cycle of 22 weeks. This cycle low was formed at 1215 in September 2013, then at 1540 in week of 31st Jan 2014 and later the bottoming date is right now. If this shorter duration cycle is working well then we should seeatleast an upside push from current levels towards the recent high of 2500 or probably towards 2550 levels.
Hourly cycle analysis:Trading can be challenging even using a 22 weeks cycle and so we come down to 53 hourly cycle shown on 60 mins chart. This chart clearly reflects important lows near the cycle period. Even this time,prices formed bottom at 2350 on 23rd June and bounced back from the cycle lows. The move on upside yesterday took out previous pivot high at 2440 and showed a sharp rise in final hour of trading. Many will attribute this rise towards news of excise duty butMaruti had its cycle due exactly before the news event. Trading using news can be as challenging as throwing a dart in the dark. It is better to use the objective tools at our disposal before taking any subjective decisions.
In short, the concept of Time cycles is very deep and we are simply trying to use this technical indicator combining it with channels and trendline break on upside to get objective outlook. This is now giving us an upside target of ……
To know detail analysis with the target of Maruti Subscribe to our Financial Waves Short Term Update now and get full research report with Nifty and 3 stocks analysis. To subscribe visit

No comments:

Post a Comment