Assembly elections 2016 counting is still ongoing but markets are still stuck in a range. There is no trending move for many weeks now and it seems the news is already discounted.
I distinctly remember the euphoria created before the central elections outcome in 2014, Nifty formed a low near 5118 levels in August 2013 a whole 8 months prior to the election outcome. On the Election Day Nifty in fact touched the high of 7563 on 16th May 2014 – election outcome before reversing back and entering into red territory momentarily. This has been clear reflection that the event outcome was already discounted way before and surprisingly such landslide victory by BJP that no one would have imagined resulted into non-event when Nifty turned flat even though only for brief moment.
Case in point is forecasting the movement of Equity markets after the news or event is like walking blind folded. State Elections results will surely result into short term spike or volatility probably a random movement but eventually the original trend or pattern will resume its course.
We at Waves Strategy Advisors, believe that markets are patterned and follow a rhythmic path determine by Elliott wave. Also everything is governed by natural laws and so market also follows Time cycles that is integral part every creation.
Now look at the below chart of Nifty along with forecast done on 12th May 2016 morning research report “The Financial Waves short term update” before equity markets opened:
Nifty 60 mins chart:
Nifty 60 mins chart: Happened so far
The first chart of Nifty was shown on 12th May 2016 even before equity markets opened and we mentioned that following:
In short, yesterday’s volatile move has not changed the structure so far and prices have managed to protect the important support areas. A spike high or low act as important levels and so move above 7900 is crucial to resume up move towards …….. Slow drift with lack of momentum will further confirm our assumption of Ending diagonal pattern. Nifty can follow the path as shown on above chart!
Happened: It had been a week earlier we have showed the path of Nifty with very clear pattern description of Ending Diagonal structure. Prices have behaved very closely to the path so far and have exhibited perfect wave characteristics. Such movement has happened irrespective of the Mauritius Tax treaty even or the state election outcome. Now you decide yourself if markets really depend on external factors or Are already discounting the Elections outcome?
“The Financial Waves short term update” is a daily research report that contains detailed Elliott wave counts on Nifty, Bank Nifty and stocks along with applied technical tools and explanation. Markets do not move randomly but in predictable patterns that can help us making right trading decisions! Know more on how to get accessto this research report HERE!