Neo wave is advanced concept of Elliott wave that helps us to reduce the number of probable scenarios and many times provide just one possible outcome that looks most probable.
Trading is also based on scenario analysis and one has to bet on probabilities rather than certainty. We take a step forward and combine this advanced study of Neo wave with Time cycles to deduce the best possible outcome.
Indian equity markets have entered into one such very high conviction trade setup over short to medium term. Now look at the below chart of Nifty as per Neo wave analysis which is picked up from the weekly research report “Where to Invest NOW?” published every week along with outlook on Gold, Mutual Funds with applied Elliott wave under the flagship of Waves MF Advisors.
Below is the detailed analysis on Nifty using Neo wave from that report –
The above chart shows a Diametric pattern which is a 7 legged corrective pattern. This is a BOW – TIE Diametric looks to be complete at the high of 8845 and post that the primary wave on downside has started. If this is correct than we should head for much lower levels from here against the majority who are advising on buying on dips as the index has already corrected by around 8%. If this strategy has to hold true then imagine what would have happened to your investments in 2008 and 2011.
The above chart is definitely not sending across very good signs and it is time to stay cautious! Break of important levels can result into serious capitulation which will be a surprise to majority. Volatility will increase, Movement of more than 150 points will become a norm and everyone will start finding out logical reason or rather news why prices are falling. All this will be post the fall but for now STAY ALERT and forecast the future rather than relying on postmortem news!
Detailed justification for the above outlook is given in the weekly update “Where to Invest NOW?” and the short term research report “The Financial Waves short term update”
We do not use Neo wave in isolation but try to combine it along with Time cycles, Fibonacci ratios and many other basic but important technical tools to keep us objective on the most probable scenarios.
To know where Nifty is headed from here over medium to long term subscribe now to this weekly research report and get indepth analysis with most objective techniques applied.