Wednesday, August 24, 2016

Nifty inverted scale- What to expect next?

Stock tips and trading on Nifty can be challenging in sideways market. Below shows how charts can be looked differently.

Below is the Nifty 60 mins chart. At first instance one may get surprise as this shows that prices are in downtrend from last few months. However this is not true and we have shown Nifty on inverted scale. Inverted scale means totally the opposite image of the original chart. The reason behind showing this in The Financial Waves Short Term Update is to analyze the chart without any bias. The range bound action of last one month has resulted in to more confusion among trader and investors. During such scenario inverted scale chart can provide some hints towards next trend. One should always use price confirmation techniques to confirm the trend. Below research we have taken from the report published in the morning of 23rd August 2016.   

Nifty Inverted chart: 60 mins

(part of research taken from 23rd August 2016)

Wave analysis:

Nifty had a positive opening but prices drifted lower in the opening hour itself and touched intraday low of 8614 during later part of the day. Movement was absolutely sideways within the narrow band of 8650 and 8620 for most part of the day. Such narrow movement for many days has turned the environment dull and lackluster. Picking up stocks during such conditions is also not easy. Stocks like Voltas, Petronet LNG, Cairn India that were showing strong momentum suddenly reversed with a loss of nearly 3%. This suggests that stock picking can be challenging.

Nifty 60 mins on inverted scale, as we tend to look at patterns differently during a downtrend. As per this chart, Nifty is intact in downward moving channel from last few months. However from the start of August 2016 momentum on downside is not building and there is probable formation of Ending Diagonal Pattern which suggests that trend may be at the matured stage. Again look at the scale which is inverted. Apart from that, 194 hours Time Cycle is working well to capture important reversals. Prices are now close to the same cycle and hence action becomes crucial of next few days. So whether it’s inverted or normal chart, we can see that signs of maturity exhibits on both these charts. This is the ideal way to look at the market without any bias. Nevertheless use of price confirmation is most important to confirm the scenario which we will get only…...

There are many ways to analyze the market and maintaining the objectivity is must while trading. Hence one should be prepared for the next trend with key reversal areas which can guide for the breakout. To know the in-depth research on Nifty with medium term as well as short term Elliott wave counts and 3 stocks, subscribe to “The Financial Waves Short Term Update” Subscribe Now by visiting Pricing Page

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