SBI announced quarterly results today but Is it right time to BUY?
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Trading based on news can be very challenging. Nifty is currently trading in green even after the negative news of IIP data which was below estimates and increase in inflation more than expected.
Trading based on news can sometime be disastrous. IIP data, Inflation data, GDP figures etc are all parameters that is outcome of past and markets are constantly trying to discount the future. Even the results of companies are of past quarter and might give rise to only short term spike and not change the major trend.
SBI declared its post quarter results today. The stock is currently up by almost 3% but this can be only short term effect of an event. We therefore use other tools like technical analysis, Elliott wave to understand the future direction of stocks or markets.
Below is an example of Anticipated and Happened move on SBI:
SBI 120 mins chart: Anticipated on 21st October 2013 when it was trading near 1680 levels.
Waves Analysis:
We have mentioned in previous report dated 21st October 2013, “as long as 1600 is intact on downside, bias is positive and prices can move towards 1710 where upper range of consolidation is in place. Any break above 1710 will infuse buying pressure and it can move higher towards 1850 where a previous month high is placed.” BANG ON!!
SBI moved in lines with our expectation and sustained above the strong support of 1600. Prices broke above the resistance of 1710 and moved violently towards 1850 levels. The above chart is shown as of 5th November 2013.
SBI has declared results today but the stock has broken below the important channel and is trading near 1700 levels. So does this result going to act as trend reversal or the downtrend will eventually resume? To know the future path action of this PSU major you can subscribe to “The Financial Waves” daily research report that has Nifty direction along with 3 different stocks on rotational basis. For more write to us at helpdesk@wavesstrategy.com or call us at +91 22 28831358 / +91 9920422202 or get subscription charges here http://wavesstrategy.com/index.php/store.html
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