Time cycle is one of the important concepts along with price confirmation which can help us in trading or investment from short to long term perspective. There is no specific time cycle periods or days that works on specific asset but one needs to apply different time cycle observing the important lows and highs formed in price chart. It is as good as finding the moving average which is providing vital support or resistance. Many of the analysts suggest the importance of 200 days moving average however on certain charts you will not find any use of 200 days moving average (MA). So one need to find out the MA which is working on chart. So applying time cycles is more of visualization process rather than any system.
“The Financial Waves Short Term Update” covers Nifty and 3 different stocks on daily basis where short term trading opportunity exists. In the research of 23rd June 2016 we covered ICICI Bank applying 68 days Time cycles which has worked most of the time as topping one. Thus Elliott wave pattern along with Time cycles was suggesting that downside pressure should increase for next few days. At the time of publishing the research ICICI bank was trading near 240 level and post that it moved lower towards 221 level.
ICICI Bank daily chart: (taken from the research published on 23rd June 2016)
(part of research published in the morning of 23rd June 2016)
The daily chart of ICICI Bank shows that the rally witnessed in last 2 months from the lows of 180 is corrective in nature which indicates that minor wave x of Triple standard correction is ongoing. Post breaking the downward moving channel, prices failed to pick the upside momentum which further confirms that still few more months of sideways to negative action is left looking at the Time Cycle of 68 days.
The above chart shows that on most of the occasions this Time cycle has acted as a topping one. Main power of cycle lies in capturing important lows as cycles of different periodicity are synchronous during low formation and dispersed during the topping process. Nevertheless, we assume what has worked in the past will work in future as well.
Using this cycle along with Elliott wave helped in identifying short term opportunity on downside. Post that the stock has reversed back and is now again re-testing the levels of 240 but the validity of the cycle will remain as long as the highs at 257 is protected. This gives very vital information to a trader or investor who now knows what should be the strategy for ICICI Bank and the probability of success will lie more on negative side.
We use Time cycles to forecasts Elliott wave patterns for getting high conviction trade setups. This is one of a few techniques we used that helped us to win the ET NOW stock trading game show.
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