Wednesday, August 20, 2014

L&T: How to trade short term reversals using Elliott wave, Fibonacci and RSI indicator?

Trading is all about probability and using objective techniques help in timing the trade. 
One should have a set of methods and wait for the opportunity before finally pulling the trigger. It should not be any different than playing a game of probability and following the rules very strictly.
The below article highlights on the trade setup we normally follow and publish in our research reports.
Larsen and Toubro 60 mins chart: Anticipated on 13th August 2014 
The following is mentioned in the morning report “The Financial Waves short term update” on 13thAugust:
….. This wave …. has arrived near the channel support where currently prices are moving in sideways action. Momentum indicator RSI also arrived near the level of 30 from where it has reversed on upside many times. 100 days Exponential moving average is working very well as support since September 2014.
As shown in 60 mins chart, w……. Minor wave c has arrived near channel support from which bounce back on upside was witnessed in the last trading session. Now, move above 1510 will break immediate resistance and then move towards channel resistance can be expected which iscoming at 1550 levels. Break of this channel with stronger momentum will indicate that ………
In short, L&T has arrived at crucial levels. Move above 1510 will take prices towards 1550 levels. On downside 1440 will act as an important support.
L&T made a low at 1441.75, very well protected the pivot support level of 1440 and bounced back sharply from there.
Not only that, observe how well this stock has respected the 61.8% Fibonacci level.
So, Elliott wave, RSI, Channels, Fibonacci, Exponential Moving average all of these indicators strongly pointed towards one direction i.e. UP. Prices have now arrived near the channel resistance so what will be next target zone if it breaks? And which wave will it be? To know the answer subscribe now “The Financial Waves short term update” and get insights into Nifty along with 3 different stocks and the reason why we have been bullish on Indian markets since a week!!!

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