Many might be still wondering and trying to figure out the logical reason for strong selloff in Indian equity markets over past few weeks. The intensity of the down move has been increasing and Nifty is down by more than 2% without any significant news or event. This is simply showing that every pullback is now temporary and the major trend has reversed from positive to negative. During such scenario when the movement is against the majority the only objective technique that remains tested for time is Advanced Elliott wave – Neo Wave along with Time cycles.
It is these studies that helped us to stay on the short side of the trend and constantly warn our subscribers about the impending turn in the overall trend. Now the big question is – Are we headed towards much lower levels from here or the down move is just temporary?
Let us look at a few concepts of Time cycles and Elliott wave to understand:
Nifty daily chart:
The above chart shows two important time cycles as per Hurst’s analysis – 54 days and 108 days cycle. The cycle reaches its maximum downside acceleration at the zone of 75% completion. 108 days cycle is now already at 73% completion so we are headed for the crash zone as per this cycle. Another cycle of 54 days is now heading towards 50% which is the topping area. So after next few days this cycle will also turn on downside. So as per cycle theory there is still lot of room on downside and today’s sharp down leg can just be its first leg of accelerated momentum.
Subscribe now to “The Financial Waves short term update” and get “The Financial waves monthly update” free for annual subscription. We do not want our readers to miss out on long term structure which is very important as the overall trend is changing. For subscription options visit the Pricing page.
As per Neo Wave – Advanced Elliott wave: we have completed a very important uptrend that started from the lows of 5118 in August 2013. This is for the first time that prices have also formed lower highs and lower lows which is classical confirmation as per DOW Theory as well. We will not be able to reveal our downside targets from here as it is meant for paid subscribers but the hint is we use Fibonacci levels from the truncated areas to get exact target zone!
It is now always that the technical picture gets aligned all together very accurately. Such alignment happened weeks back and probably this is the time again where everything is hinting towards the same thing – A probable CRASH! However, do not get carried away and use prudent stoploss levels in case market decides to play out otherwise. Our short term research report along with long term monthly forecasts gives a complete view on Indian equity markets and stocks with utmost objective techniques.