Nifty bounced back from the support zone near 7250 which had been very important support levels that we have been mentioning in our research reports for quite sometime.
We have been able to capture the majority of the turning areas very accurately including the major tops made at 9119 in March 2015, Top of August 2015 post which there was a crash from 8400 to near 7500levels and then the top made at 8200 followed by 7950. Each of these tops occurred exactly on the cycle day or very close to it. Below chart needs little explanation that shows the Topping Time cycle.
Figure 3: Nifty daily chart – 49 days Topping Cycle and Bollinger Bands (shown on 5th January 2016)
Below cycle is picked up from the Monthly research report:
49 days Time cycle: We have seen bottoming Time cycles working very well but at times it is important to look at the Topping cycle as well. This 49 days Time cycle is shown in Figure 3 on Nifty daily chart. We have been using this topping cycle for many years now and it has produced the desired outcome most of the time. As per this important tops are formed every 49 days and we can clearly see the top of August 2015 post which there was severe selloff which was also formed on this cycle day. After 3 months we have seen a fall of more than 150 points on Nifty on 4th January 2015. This indicates short term bearishness for few days.
This was about capturing the top. Now read below and see the chart yourself that helped us to capture the very crucial low made at 7240. The below chart was shown in the daily research publication “The Financial Waves short term update” on 18th January 2016 well before market bottomed out near 7240.
Nifty weekly chart: (as shown on 18th January 2016)
Bank Nifty daily chart: (as shown on 18th January 2016)
The below research was published in morning of 18th January 2016
Importance of Channel intersection: During times of high volatility and extreme sentiments the moist reliable technique that comes handy is the Channeling method. The weekly chart of Nifty shows two different channel intersections near the zone of 7250 – 7300. Intersection of trendlines are very important zone and becomes all the more relevant when it connects two different cycles. We can see that the support area as per the upward sloping blue channel which connected the euphoric rise of 2014 is near 7200. On the other hand, red downward sloping channel connects the cycle of correction of 2015. Interestingly the support of this channel is now near 7300 and to add importance to it both of these important trendlines is intersecting near 7250. This gives lot of objectivity and the worst case scenario analysis for the current trend…..
Happened: Nifty made a low at 7241 on 20th January 2016.
Applying channel to leading sector – Bank Nifty: The sector that is leading the fall is Bank Nifty. The daily chart of Bank Nifty shows parallel lines connecting the tops and the lows. We can clearly see that prices are now approaching near the lower trendline of the channel with the support zone lying near 14700 – 15000 mark. We are now close to these levels and this week is going to be crucial. But please understand this doesn’t mean one should start creating long positions at current levels. Unless we see a base formation with strong positive close and faster retracement above the last falling segment it is prudent to avoid catching a falling knife and allowing the market to decide its low levels.
The zone of 7250 – 7300 is very crucial channel support on Nifty and 14700 – 15000 is the support zone on Bank Nifty. There is high probability these levels will be respected but let market confirm the scenario probably this week.
Happened: Nifty touched 7241 hardly 9 points below the level of 7250 on 20th January and reversed sharply from there to move close to 7500 mark whereas Bank Nifty touched 14750 on same day close to the lowest level of 14700 which we mentioned and reversed sharply from there to move above 15500 in today’s session.
The above research shows the application of only Topping Time cycle along with Channels. Simply imagine the power when we combine this with Neo wave and indicators like RSI, Bollinger Bands to understand the path ahead and capture key reversal areas to ride the next trend!
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Announcing Exclusive course on Time Cycles and Neo Wave - Advanced Elliott Wave for Portfolio Creation, Stock Selection & Trading…
Get ready for the markets in 2016. We strongly believe that the downtrend that started in 2015 is in matured stage and we are now getting ready for a very strong reversal and uptrend. For now there is no positive confirmation but the technique of Time cycle along with two stage confirmation as per Neo wave techniques which is Advanced part of Elliott wave is providing leading signals.
We have been able to capture the top in 2015 very accurately and are optimistic to rely again on these objective and scientific methods rather even if it is against the crowd to take correct and independent decision. You can also learn these techniques and start building on the experience of capturing the major turning areas.
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