Nifty Elliott wave trading strategy!

The below research is published by Waves Strategy Advisors. For subscription to daily research visit Subscription Page

Nifty had made many traders complacent by trading in a narrow range of 6250 and 6350 for more than a week until yesterday. 

During such sideways action there is tendency for traders to hold the positions and slowly get settled in hopes and expectations. The emotions stay low when markets are range bound. But on the breakout of the range there especially in opposite direction than expected the anxiety starts to creep in.

The trading environment of yesterday was more of this sought when Nifty failed to sustain above 6350 levels and very quickly gave away more than 100 points of gain. However, for almost a week we have been warning our subscribers that the up move looks to be limited and break of 6250 level can trigger the next downtrend.

Below is a brief excerpt from the report “The Financial Waves Short term update” a flagship product which has Nifty and 3 different stocks along with Elliott wave counts in combination with basic technical analysis.

Nifty 60 mins chart as on 30^th December 2013:

Nifty 60 mins chart as on close of 2^nd January 2014:

On 30^th January 2013 morning research report itself we have mentioned that “The up move has so far consumed 5 days from the low of 6150 and 7 days from the low of 6130 and so far retraced mere 61.8% of the previous down leg. The overall structure is also not impulsive as of now. This increases the possibility that wave b from the high of 6415 is still ongoing in the form of Flat correction. As per the alternate labels shown in red on 60 mins chart, wave (b) of b is currently in progress which can terminate near 6340 – 6350 level i.e. 76.4% retracement level and wave (c) on downside towards ….. can start.”

On 1^st January morning research report we mentioned “Cash volumes in 2013 have been the lowest since 2008 onwards even though F&O volumes have gone up. This is simply showing that the interest in cash delivery has been constantly reducing and is symptomatic of the ongoing correction since 2008.”

On 2^nd January 2014 morning research report we mentioned “In a nut shell, looking at the current momentum there is very high likelihood that prices will break 6250 on downside in coming trading sessions and we will see good trending move but as long as 6250 or 6350 on upside are intact sideways action can continue. Let’s hope that very first week of the year may end the vacation mode of market!”

Nifty did come out of the vacation mode exactly as expected. This can be a strong trending move with following studies in sync – Time Cycles, Elliott wave counts, RSI, Channels, Momentum. All of these have been clearly explained one single research report along with charts of stocks as well.

In Nifty trading strategy report following is the trade given yesterday “Strategy for the day:Yesterday we mentioned that,"long positions can be created on move above yesterday's high of 6320 with 6300 as stoploss and target of 6350. Short positions can be created below 6280 with day's high as stoploss and target of 6250. Clear trend or good trade will come only on move above 6350 or below 6250 levels." BANG ON!!!

Happened: Nifty moved exactly as expected in both the directions as it touched the target of 6350 and then reversed and went below 6250 levels!

You can subscribe to this research report “The Financial Waves Short term update” by visiting http://wavesstrategy.com/index.php/store.html and we will automatically start your subscription. The report will be delivered to your mailbox before market opens.