Wednesday, September 10, 2014

Neo wave - How to identify an impulse pattern and confirming its completion?

United Spirits has been in news post the debacle of Kingfisher airlines. We are not analyzing the correlation or impact of Kingfisher going to have on United Spirits stock price.
Over here we are going to analyze the independent price movement of United Spirits irrespective of the news going around.
The most important technique we apply is Advanced concept of price and time using Neo wave – Advanced Elliott wave.
One of the important technique to catch a reversal is to look at Price and Time reversal confirmation given by Neo wave
Let us now analyze below chart (published in today’s morning research report with short term charts)
United Spirits (McDowells) Weekly Chart:
Wave Analysis:
As shown in daily chart of United Spirits, since mid 2012 exponential rise from 500 to 2950 was witnessed. As per Elliott wave perspective, this up move is clearly divided in 5 waves. From the mid 2013 prices were trading in vth wave which has formed wedge pattern. Recently stock has broken down from the wedge pattern which suggests that up move from 500 to 2950 is complete and correction on downside has started.
1st stage confirmation:Advanced Elliott wave concepts suggests that break of the 2-4 trendlineor b-d trendline (in case of wedge) in faster time than wave 5 or wave e (wedge) took to form will provide 1st negative confirmation. In above chart we can see that b-d trendline is broken in less number of days that wave e took to form thereby confirming that the trend is reversing.
2nd stage confirmation:If wave 5 or wave e (wedge) is retraced in faster time than it took to form it will further confirm that the impulse up move is over and correction has started. Wave e shown above is completely retraced in faster time which further virtually confirms the reversal has happened.
This is a very important concept of Advanced Elliott wave –Neo wave that increases the probability drastically in favor that the corrective mode might have started. However, it is important to look at short term charts as well and the post pattern implication that gives the downside target which is explained in our short term daily research report “The Financial Waves short term update”. To know more about this stock, Nifty and where Indian markets are headed subscribe by visiting the Pricing Page.
Attend the 2 days training workshop on most Advanced Technical analysis training ever in Mumbai scheduled on 11th and 12th of October. This training session will cover the above mentioned technique and how we apply it practically on charts to trade profitably when probability of success is higher! For more details on training program contact us at or call us on +91 22 28831358 / + 91 9920422202

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