Sensex reached near 18000 in 15 days exactly as Anticipated!!!

Bottom Line: Sensex reached near 18000 in 15 days exactly as we were anticipating! Time Cycles cannot be more accurate than this…

Sensex Daily chart: Anticipated on 14th October 2011

Happened:

Sensex: Time Cycles:

We mentioned previously on 14^th October, “Everything is so systematic that it cannot be controlled or manipulated but humans by default exhibits this natural phenomenon and makes prices move within channel, following 15 days rally, that retraces 76.4% of fall, with each down leg having 3 waves, and each 3^rd wave forming positive divergences!!! 

If the same systematic approach continues the current rally is only in its 6^th day with approximately 9 more days to go and current up leg should also retrace 76.4% of previous down leg taking it near 18000 to 18300 levels which is also the upper end of the channel, 23.6% level of retracement level of entire rally since bottom of October 2008 (now act as resistance) and resistance line coming in from November 2009 lows (shown on 1^st chart). All these precisely converge together at 18000 – 18300 levels and this should be touched on 26^th October ( +/- 3 days).” Simply PERFECT!!!

On 26^th October, Indian equity markets were open for only 1.15 hour on account of Muharat trading and 27^th October was holiday. So ideally 28^th October becomes likely date for 18000 levels and index opened with a huge gap of almost 400 points that day making a high of 17908. This is in perfect sync with the symmetry we have observed.

It is now imperative to observe how Sensex reacts from current levels. A sideways consolidation forming a rounding type pattern has been seen during previous tops near the downward sloping trendline and so we can expect a similar sideways consolidation near 17900 – 18300 levels before the down leg starts!

Happy Diwali & Prosperous New Year!!!

Wish you all a very Happy Diwali and Prosperous New Year!!! Hope coming year provides better predictable opportunities...

Waves Strategy Advisors: Elite market Forecasting and Research House in India

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Waves Strategy Advisors is one of the elite market forecasting and research house in India.  Waves Strategy Advisors  provides in depth analysis and forecasting of global markets across varied asset classes including Equities, Commodities, Currencies, Bond Yields. Analysts at  Waves Strategy Advisors  are qualified Chartered Market Technicians (CMT) & Chartered Financial Analysts (CFA) who employs unique techniques of Economic, Cycle and Intermarket analysis along with Elliott waves to derive at market forecasting ranging from hourly, weekly, monthly, annually and long term predictions for decades.

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Provide Quality & Customized Research reports covering varied asset classes across the globe

Provide intraday trading suggestions for Equity, Currency and Commodity markets

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Vision:

We, at  Waves Strategy Advisors , believe that the market movements are structured and patterned in the form of recognizable and repeating “WAVES”. It is the psychology and emotions of the crowd that shapes & drives the overall movement across the freely traded markets and it is plausible to predict or forecast those movements using techniques of Elliott Waves. Intermarket Analysis combination along with Waves help in increasing the odds in our favor. Forecasting future and the flux of emotions running through minds of millions at the time of trading is uncertain but not completely unpredictable.

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Our entire market forecasting team believes in “Quality” by giving even an intraday trade suggestion only when Risk is less and Reward is best. 

Sensex: Time cycles at its best, Sensex Blue Print!!!

Sensex Daily chart: Previously mentioned on 25^th July 2011

Happened: Low formed exactly in October 1^st week

Sesnex: Time Cycles

Sensex 69 days Time cycles was first shown on 25^th July 2011. The cycle low at that time was marked on 5^th October 2011. When we revisited this chart with updated data it was a thrilling experience to see a low precisely made on 5^th October 2011 at 15760. The very next trading day Sensex opened Gap up at 16222, a gap up opening of more than 450 points. Time cycles cannot work more precisely than this one.

This is a real challenge to the critics and who believes Indian markets are manipulated and controlled by few large players having insider information. If that is the case the question to ask is, Is there a Blue print laid out which shows that every 69^th day a bottom should be formed in Indian markets that give rise to a rally for atleast 15 days?? Every cycle bottom resulted in a rally that lasted on an average 15 days.

Apart from that the each rally retraced the previous leg by exact 76.4% retracement i.e. the next leg of rally after the fall moved up 76.4% of downfall.

Each down move was also extremely systematic. Every down leg had 3 sub waves to it, in which the 3^rd down wave came very close to the 1^st down wave (marginally above / below) and also each 3^rd wave was associated with strong positive divergences.

Sensex is also moving within the down channel very systematically. Every time this channel is touched prices reverses, up from lower trendline of channel and down from upper trendline of channel.

Everything is so systematic that it cannot be controlled or manipulated but humans by default exhibits this natural phenomenon and makes prices move within channel, following 15 days rally, that retraces 76.4% of fall, with each down leg having 3 waves, and each 3^rd wave forming positive divergences!!!

If the same systematic approach continues the current rally is only in its 6^th day with approximately 9 more days to go and current up leg should also retrace 76.4% of previous down leg taking it near 18000 to 18300 levels which is also the upper end of the channel, 23.6% level of retracement level of entire rally since bottom of October 2008 (now act as resistance) and resistance line coming in from November 2009 lows (shown on 1^st chart). All these precisely converge together at 18000 – 18300 levels and this should be touched on 26^th October ( +/- 3 days).

Caution: Cycles are good as long as it works and there are no prior indications for a cycle to stop working. We are assuming the current 15 days rally cycle and 69 days bigger cycle is intact. Please understand Time remains the most difficult aspect in forecasting and Risk management remains extremely crucial even if we have a high probability setup with n number of studies indicating the same thing.

Remembering Steve Jobs: Apple!

Remembering Steve Jobs (1955 – 2011):

Apple website states “Apple has lost a visionary and creative genius, and the world has lost an amazing human being. Those of us who have been fortunate enough to know and work with Steve have lost a dear friend and an inspiring mentor. Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple.”

Apple Weekly chart

We did not have the opportunity to know Steve Jobs closely but his product and stock price speaks for everything he has done for Apple.  He indeed was a great visionary and innovator and revolutionized technology the way we see it today. World has lost a great thinker and Apple has lost the most precious asset to the company.

Apple weekly chart shows how Steve Jobs created true value for its shareholders. The stock was trading below $ 10 in 2004 and hit all time high at 422 just 2 weeks prior to Steve Job’s exit from the world.

Time will tell if Apple is able to manage without the great genius and progress the way it has in past six to seven years.

However Elliott analysis on Apple’s stock price and technical study are suggesting at least some consolidation or pull back (down) might be at hand from medium term perspective. Apple stock has moved in a well defined channel since 2009 with wave 1 extended as shown on the weekly chart. Wave counts are suggesting we have completed 5 waves up and there exists strong negative divergence. A move below 340 will provide first negative confirmation and the correction of the entire rally from 75 to 420 will then start.

This means the new CEO might face tough times convincing its shareholders that he can do the job well and with same dynamism / commitment that Steve entrusted him with. The long term trend remains intact - up for now but Apple might face challenging times from short to medium term horizon.

Will Nifty rebound strongly from here! Bank Nifty at crucial juncture!!!

 Nifty 30 mins

 Nifty Daily

Nifty 30 minutes chart shows a series of overlapping structure with strong divergences across various indicators on different time frames. It looks a perfect setup for prices to bottom out here and start rallying. However we have not yet received price confirmation. A move above 4820 will provide first positive confirmation and will produce strong positive divergence even on Daily basis. History shows that whenever we see divergences on Daily, 60 minutes, 30 minutes and smaller scale charts atleast some move is expected in opposite direction (up for now) over shorter term.
Please be aware that divergences might last longer than one can think of and so price is the ultimate deciding factor. Move above 4820 – 4830 is crucial.
Wave structure suggests we are in complex X wave formation and the current down move from 5180 to 4720 is just wave b of X and wave c will be 5 waves on upside after wave b is complete.
However a move below 4720 will increase the selling pressure and index might correct till 4600 if that is taken out. It looks a lower probable scenario as of now.
In short, we expect Nifty to bottom out here and might give a strong rally given the series of divergences but price confirmation above 4820 is important!

Bank Nifty 60 mins

Bank Nifty Daily

Bank Nifty daily chart shows that we are near the end of this downtrend. We might have completed wave Y or will be completing near 8400 levels. This is also lower end of the blue channel as shown on daily chart. A turn from here will be a surprise for many and might lead to a steep rise due to short covering. However we would not like to be in way of this strong downtrend but wait for any positive confirmation as buying opportunity since downtrend is in very late stages.
As seen from 60 minutes chart, we are seeing minor positive divergences in ROC and the structure looks like an ending diagonal. Individual stocks like ICICI Bank, SBI are also showing overlapping ending diagonal formations and positive divergences. A move above 8900 will provide first positive confirmation.
However avoid initiating longs unless prices start rallying up steeply as we might be just in a wave 4 of C (shown as alternate A-B-C in red on Daily chart). This scenario suggests C wave has one more leg pending on downside. Either ways the down trend looks in matured state.
Time cycles are also suggesting a reversal is very near and a bottom should be in place soon.
In short, wait for positive confirmations above 8900 with 8400 forming crucial support level!

World Markets! Pause before the storm!!

EURUSD is not cracking and is showing positive signs. We might start seeing a rally in EURUSD and so USDINR should be a good pick for down move. Wait for confirmations but my bias remains down for USDINR...

World currencies have stopped appreciating against US dollar and so USD may consolidate for a week or more.


German markets (DAX) is on verge of up move with strong positive break out of diagonal pattern and even Nikkei. Gold and silver are consolidating. so things look to have taken a pause before the storm!!!