How Hurst Cycle along with Neo Wave can help in forecasting the pattern?

J.M.Hurst suggested that there are certain standard cycles which are universal and can be applied on any asset classes.

Many cycle analysts often complain that cycles vanish without giving prior indication. The major reason being interaction of different cycles of varying magnitude.

The subject might look complicated but it is no different than Elliott wave principle. The major difference is Hurst Cycle analysis helps us to predict time and Elliott wave focuses more onprice. This element of time can help us to forecast the Elliott wave pattern that can form in future. If you understand the logic at one level of degree, identifying and analyzing the cycles at higher or lower degree becomes more mechanical and easy.

As shown in below chart we have applied different cycle on Nifty Daily chart along with Neo Wave which helped us to predict the probable future path. The important part of Hurst Cycle is that if you know that major as well as smaller degree cycles are citing towards probable bottom or top then you can save yourself from making wrong trade. In market “when not to trade is the key to success”.

Anticipated: With the help of this Hurst cycle along with Advanced Elliott wave (Neo Wave) we expected that the rally started from 6650 in the month of May 2014 is probably making Diametric pattern. This pattern consists of 7 legs (a-b-c-d-e-f-g). Near the zone of 7600-7550 in the start of August 2014 we were expecting that wave d of Diametric pattern should complete where our Bottoming cycle as per Hurst cycle was due. As per these counts there was a high probability that Indian Market should resume upward journey towards new life time highs. Price as well as time confirmation clears the chaos and gives higher forecasting ability.

Happened: Nifty moved in lines with the expectation and made new life time high at 7968 on 25^thAugust 2014.

See in the below chart how we have applied Hurst Time cycle along with Neo Wave.

Nifty daily chart (Applying Neo wave and Hurst Time cycles)

Nifty daily chart (Happened on 25^th August 2014)

So what next from here on?

Join US for the 2 days training workshop to be held on 11^th & 12^th October in Mumbai on the most advanced concepts of Technical analysis - Neo wave (Advanced Elliott wave) combined together with J.M.Hurst Time cycles – a powerful tool to forecasts Elliott wave patterns using Time cycles – A complete different way to look at market behavior, forecasting and trading!!!

Book your seat now!

Where and when is the course?

The training is at Hotel Grand Sarovar Premiere, Goregoan, Mumbai on 11^th-12^th October 2014. This belongs to 5 star category having chain of international hotels and the fees are including Tea / Coffee and Lunch.

Registration Fee:

The charges for the Training are Rs. 18000 + 12.36% Service tax. If registered after 20^thSeptember 2014 charges would be Rs. 22000 + 12.36%Service tax

Registration is on first come first basis as there are limited seats.

How to Enroll?

To register for the training using either Credit Card or Netbanking visit http://wavesstrategy.com/payment/ and mention Product as “Neo waveTraining” and period as “1”

           OR

Fill in details at http://wavesstrategy.com/index.php/contact-us.html and we will get in touch with you

          OR

Write to us at   helpdesk@wavesstrategy.com /call us at +91 9920422202 /+91 22 28831358 

Bank Nifty: A breakout of 3 months consolidation!

Bank Nifty continued the strong outperformance which is lines with expectations. In our daily research report "The Financial Waves short term update" we have highlighted how this sector can strongly move upside when Nifty was trading near 7710 levels. For more details on subscription to daily research visit http://www.wavesstrategy.com/ 

Bank Nifty Weekly chart:

Bank Nifty Daily chart: 

Bank Nifty 60 mins chart:

Wave Analysis:

Bank Nifty has been a leading index in current rally. This has been exactly as expected and now on Friday’s trading session prices finally took out its earlier high of 15742 which was made on 16^th May 2014 and closed at days high at 15820 levels.

As shown in weekly chart, the recent consolidation which was ongoing since May 2014 is same as the one which was seen in mid 2009 as shown in blue circle. This is one of the examples of fractal nature of market. Post breakout sharp up move was witnessed in mid 2009. The same can be expected at current level. This can be confirmed with channeling technique and weekly RSI which has more room on upside.

As shown in daily chart, in the last update we also mentioned the importance of 50 days Exponential moving average which has provided good support. Prices reversed from the same average and broke out of consolidation of past 3 months.

As shown in 60 mins chart, internal structure of intermediate wave (v) suggests that minor wave iii is ongoing on upside. Now, on downside 15450 will act as an important support and as long as this level is protected we can expect an up move towards 16500 zone.

In short, our bias remains positive for Bank Nifty with the support of 15450 for an upside move towards 16500!

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Nifty: How to use Fractal Nature to predict trends & targets?

Fractal nature exists across the universe right from the DNA in human body to the galaxy.

A natural phenomenon so integral to us has to exist even in stock markets. As per this concept patterns are repeatable and make them predictable at different degrees of time. We applied this concept recently to Nifty and showed it on 11^th August morning research report. Below will give detailed view on how we predicted Nifty 1^st target zone towards 7910 levels using Fractals!

Nifty 60 mins chart: (Anticipated on 11^th August)

 Happened:

Published on 11^th August 2014 in morning research“The Financial Waves short term update”

Fractal Nature in stock markets:

As shown on 60 mins chart, the recent action is very similar to that seen during the fall of 8^th July to 14^th July with the spikes in between due to Budget. In the recent fall from the highs of 7750 as well there is spike seen on Thursday which is then completely retraced on same day followed by fall on Friday. This phenomenon is known as Fractal naturei.e. market repeat similar structure on different degrees. Going by this pattern comparison some consolidation or pull back cannot be ruled out.

Published on 13^th August 2014:

As shown on 60 mins chart, the down move in form of wave c is Ending diagonal pattern as discussed before. Yesterday’s sharp reversal has opened the possibility that wave e is complete at the lows of 7600 on 11^th August itself. This makes wave e small in terms of price compared to other legs but from time perspective it has still consumed 5 hours. If I remember correctly suchsimilar action was last seen during the up move of January 2012 where the previous leg ended in Ending diagonal pattern with wave e truncating in exactly similar fashion. It was however on a daily degree but we are seeing this on hourly degree currently. The post pattern implication at that time was the high exceeded by the factor of 23.6% of the prior down leg and if current leg indeed behaves in similar fashion then the high of immediate preceding leg at 7840 should be breached and we can reach atleast towards 7910 levels.

To know the next target level on Nifty and what are the internal wave structures along with trading strategy subscribe to “The Financial Waves short term update” by visiting the http://www.wavesstrategy.com/index.php/store.html 

Attend 2 days training on Neo wave - Advanced concepts of Elliott Price and Time along with Hurst Time cycles to time the market movements. For more details visit - http://www.wavesstrategy.com/index.php/training-on-neo-wave-a-hurst-time-cycles-in-mumbai.html 

L&T: How to trade short term reversals using Elliott wave, Fibonacci and RSI indicator?

Trading is all about probability and using objective techniques help in timing the trade. 

One should have a set of methods and wait for the opportunity before finally pulling the trigger. It should not be any different than playing a game of probability and following the rules very strictly.

The below article highlights on the trade setup we normally follow and publish in our research reports.

Larsen and Toubro 60 mins chart: Anticipated on 13th August 2014 

Happened:

The following is mentioned in the morning report “The Financial Waves short term update” on 13^thAugust:

….. This wave …. has arrived near the channel support where currently prices are moving in sideways action. Momentum indicator RSI also arrived near the level of 30 from where it has reversed on upside many times. 100 days Exponential moving average is working very well as support since September 2014.

As shown in 60 mins chart, w……. Minor wave c has arrived near channel support from which bounce back on upside was witnessed in the last trading session. Now, move above 1510 will break immediate resistance and then move towards channel resistance can be expected which iscoming at 1550 levels. Break of this channel with stronger momentum will indicate that ………

In short, L&T has arrived at crucial levels. Move above 1510 will take prices towards 1550 levels. On downside 1440 will act as an important support.

L&T made a low at 1441.75, very well protected the pivot support level of 1440 and bounced back sharply from there.

Not only that, observe how well this stock has respected the 61.8% Fibonacci level.

So, Elliott wave, RSI, Channels, Fibonacci, Exponential Moving average all of these indicators strongly pointed towards one direction i.e. UP. Prices have now arrived near the channel resistance so what will be next target zone if it breaks? And which wave will it be? To know the answer subscribe now “The Financial Waves short term update” and get insights into Nifty along with 3 different stocks and the reason why we have been bullish on Indian markets since a week!!!

Nifty at lifetime highs: How to Predict the trend before it happens?

Nifty had a strong rally from the lows of 7540 and has now rallied more than 380 points and touched intraday high of 7918 in today’s training session.

Published on 13^th August 2014 in morning before equity markets opened when Nifty crossed 7710 level!

Nifty 60 mins chart: 

Happened:

Following was mentioned on 13^th August 2014,

In previous update we mentioned that “The entire move on downside from the high of 7840 is enclosed within the red channel and close above 7710 will be first sign of positive reversal which will break the previous pivot high and also the downward sloping channel… In short, above 7635 the current up move can continue towards 7680 levels. For further positivity strong break above 7710 followed by 7750 will be important.”

For consecutive second day, Nifty had a Gap up opening of nearly 30 points and managed to sustain the Gap throughout the day. The action was similar to that of Monday’s movement but prices managed to generate momentum post 2 pm and closed above 7710 level. The strong move broke 7710 level decisively and also the downward sloping red channel. This increases the odds that the entire correction that started from 7808 levels on 8^th July 2014 is probably complete and next uptrend has started.….If I remember correctly such similar action was last seen during the up move of January 2012 where the previous leg ended in Ending diagonal pattern with wave e truncating in exactly similar fashion. It was however on a daily degree but we are seeing this on hourly degree currently. The post pattern implication at that time was the high exceeded by the factor of 23.6% of the prior down leg and if current leg indeed behaves in similar fashion then the high of immediate preceding leg at 7840 should be breached and we can reach atleasttowards 7910 levels.

Happened: Nifty touched an intraday high of 7918 in today’s trading session!

On 14^th August 2014, following was mentioned - In short, for current structure to remain valid it will be important for Nifty to protect the previous day low near 7695 followed by 7655 and broader market should show some recovery attempt. For now as prices managed to close positive the short term trend is up. Use strict stoploss of 7655 in case of sharp reversal!

On 18^th August 2014, following was mentioned –In short, using a simple bar technique method is best strategy and as long as prices do not close below previous bar low which is now near 7740 the trend will be positive. A positional trader can use 7700as important risk management level. Faster move above 7840will be crucial which will further confirm the positive outlook!

Despite all the negative sentiments, poor IIP data, higher CPI inflation, Ukraine crisis, IRAQ attack,mixed results Indian markets have continued to rise the wall of worry and is trading in unchartered territory. All this while we have been using not only Elliott wave theory, Time cycles but also a simple bar technique and advised the subscribers to use trailing stop method and mentioned crucial levels. So far the long positions are still intact using that method and the 1^sttarget near 7910 level is touched. However, there is still steam left and find out what is the next target zone.

Trading based on news is challenging and cannot be objective. The action of past few days clearly reflects that. Rather use a systematic method and trade objectively. Subscribe to “The Financial Waves short term update”and get daily insights into what made us turn bullish above 7710 and which were the crucial levels that Nifty has so far managed to cross that too in faster time. For subscription option visit http://www.wavesstrategy.com/index.php/store.html

To learn the various techniques we use right from simple bar method, Neo wave and Advanced Time cycle concepts – Hursts Cycle theory and forming daily trading strategy attend the 2 days training seminar to be held in Mumbai. For more details contact us at helpdesk@wavesstrategy.com or call us at +91 22 28831358 / +91 9920422202.

HDFC Bank – A clear impulse Elliott wave pattern!

Elliott wave gives chart an identity and provides vital information on the maturity of the overall trend. 

It not only helps to understand the direction but the other basic technical tools like Moving averages and indicators like RSI makes a lot more sense when combined with Elliott wave structure. Many times even strong RSI divergences do not produce desired result. This is a typical characteristics produced during the formation of wave 5 on upside.

Now look at the chart below of HDFC Bank without Elliott wave counts:

HDFC Bank weekly chart:

Now see how much more information we get by simply adding a few numbers – Elliott wave counts on the chart:

HDFC Bank weekly chart:

Looking at the above chart, for an investor or a trader one can conclude that the trend that started from the lows of 150 in early 2009 is in matured stage of up move. Prices are already showing negative divergences on weekly scale which further confirms that the current ongoing leg is wave 5. Also this wave 5 is internally subdivided into smaller 5 waves and we are now in intermediate degree v of 5. This means one minor upside push is pending in this stock and once the lows of 20 weeks Exponential Moving average breaks we will get first negative confirmation i.e. below 780. For longer term trend reversal confirmation we should wait for 100 weeks Exponential average to break which is placed near 700. Once this happens Fibonacci retracementratios will kick in that will help us with projections.

However, since the uptrend can continue for few more weeks or months one needs to look at daily and short term charts for further clarity on overall timing the trade or investments!

To know more about such trading strategy, subscribe to “The Financial Waves short term update” by visiting Pricing Page

Attend 2 days training seminar on “Neo wave – Advanced Elliott wave combined with Hurst Time cycles” – the most Advanced technical analysis program ever conducted.For more details on seminar visit http://www.wavesstrategy.com/index.php/free-articles/trading-lessonsa-education/966-what-is-hurst-time-cycles-analysis-and-combining-with-advanced-elliott-wave-neo-wave.html

Is Nifty due for a strong up move despite poor IIP & CPI data?

Bottom Line: Nifty had another Gap up opening and managed to cross above 7710 level. Further move above 7750 to confirm start of next leg on upside!

The below research is published in "The Financial Waves short term update". For subscription to daily research reports visit http://www.wavesstrategy.com/index.php/store.html

Nifty daily chart: 

  

Announcements:

“The Financial Waves Monthly Update” is now published. The current research focuses on relative comparison of different sectors in rally started from August 2013 in Indian Equity Markets. Understanding PE Ratio, GDP Growth with Sensex. Analysis of Baltic Dry Index to know the overall health of the Economy. TVS Motor exhibits good opportunity from investment perspective and long term path of the same is explained as per Elliott wave theory. Gold/Silver Ratio to know which asset class will outperform or underperform over short to medium term. EURUSD path ahead as per Elliott wave theory.

Subscribe monthly research report “The Financial Waves Monthly update” by visiting http://wavesstrategy.com/index.php/store.html and see yourself the long term forecasts and world markets at a glance.

Nifty 60 mins chart:    

Wave Analysis:

In previous update we mentioned that “The entire move on downside from the high of 7840 is enclosed within the red channel and close above 7710 will be first sign of positive reversal which will break the previous pivot high and also the downward sloping channel… In short, above 7635 the current up move can continue towards 7680 levels. For further positivity strong break above 7710 followed by 7750 will be important.”

For consecutive second day, Nifty had a Gap up opening of nearly 30 points and managed to sustain the Gap throughout the day. The action was similar to that of Monday’s movement but prices managed to generate momentum post 2 pm and closed above 7710 level. The strong move broke 7710 level decisively and also the downward sloping red channel. This increases the odds that the entire correction that started from 7808 levels on 8^th July 2014 is probably complete and next uptrend has started. However, further move above 7750 will be important to confirm this scenario.

An interesting thing to observe is that the entire up move from 7422 towards 7840 did not produce any sustainable Gaps and currently we have observed 2 consecutive Gap up which has remained unfilled. If the Gap area created yesterday between 7625 and 7655 remains open even today and prices later manages to cross above 7750 it will indicate that wave c of the Irregular Flat correction is complete and the next wave on upside has started.

As shown on 60 mins chart, the down move in form of wave c is Ending diagonal pattern as discussed before. Yesterday’s sharp reversal has opened the possibility that wave e is complete at the lows of 7600 on 11^th August itself. This makes wave e small in terms of price compared to other legs but from time perspective it has still consumed 5 hours. If I remember correctly such similar action was last seen during the up move of January 2012 where the previous leg ended in Ending diagonal pattern with wave e truncating in exactly similar fashion. It was however on a daily degree but we are seeing this on hourly degree currently. The post pattern implication at that time was the high exceeded by the factor of 23.6% of the prior down leg and if current leg indeed behaves in similar fashion then the high of immediate preceding leg at 7840 should be breached and we can reach atleast towards 7910 levels. However, for now move above 7750 will be very crucial and on downside yesterday’s Gap between 7625 and 7655 should be protected.

The poor IIP data and higher than expected CPI data can result into short term down move but it will be crucial to observe if by closing market can manage to move above 7750 levels. Also these data are for the past and equity markets are discounting the future. Let us see if this news can result into temporary correction else deeper retracement below 7655 will force us to change the wave structure.

In short, further move above 7750 level will confirm the start of next leg on upside with 7650 acting as important support. On downside the Gap area of yesterday between 7655 and 7625 should be protected for positivity of past 2 days to continue.

To get updates before market opens on stocks and Nifty subscribe "The Financial Waves short term update" by visiting http://www.wavesstrategy.com/index.php/store.html

What is Hurst Time cycles analysis and combining with Advanced Elliott wave (Neo wave)?

Financial markets are governed by recurring cycles having similar characteristics. There are multiple cycles acting at any given point of time and so using only 1 single cycle can result into failure of time projections. The most basic parameters of cycles include amplitude, period and phase.

J.M.Hurst suggested that there are certain standard cycles which are universal and can be applied on any asset classes. Many cycle analysts often complain that cycles vanish without giving prior indication. The major reason being interaction of different cycles of varying magnitude.  

The principles of Nominality, Harmonicity and Synchronicity are the building blocks for Hurst cycle analysis. Hurst observed that longer cycles are multiple of shorter cycles usually by the factor of two.

As per Hurst Nominal model there is 54 years cycle followed by shorter 18 years and shortest 9 years at same degree of magnitude.

On a lower scale there is 9 year cycle that divides into two 54 months cycles which further divides into three 18 month cycles that further divides into two 9 months cycles.

Going further low, we then have 80 weeks, 40 weeks, 20 weeks and 10 weeks cycles followed by 80 days, 40 days, 20 days and 10 days.

The above different magnitude of cycles simply reflects that using only 1 single cycle for forecasting Time can be extremely challenging. The subject might look complicated but it is no different than Elliott wave principle. The major difference is Hurst Cycle analysis helps us topredict time and Elliott wave focuses more on price. This element of time can help us to forecast the Elliott wave pattern that can form in future. If you understand the logic at one level of degree, identifying and analyzing the cycles at higher or lower degree becomes more mechanical and easy.

Nifty daily chart (Applying Neo wave and Hurst Time cycles)

The trendlines shown in different colors is based on the cycle analysis. Yes, this concept of drawing trendlines based on cycles is known as Valid Trendlines (VTL). It simply highlights whichtrendlines are important and should be used when there are multiple possibilities. Ever thought why break of few trendline does not produce any momentum whereas at times we see a serious capitulation?

The above chart of Nifty is marked with only 55 days (trading days) cycle but the bottom section shows phasing analysis done and highlights different (calendar days) 20 Weeks, 80 days, 40 days, 20 days and 10 days cycles. Applying cycles of so many degrees ensures higherprobability in terms of time and applying Advanced concepts of Elliott wave (Neo wave) ensures high probability in terms of price. Combining both of these methods can give a lethal combinationof most advanced concepts of applied Technical analysis.

However, one should understand trading and investing is the entire game of probability and Risk & Money management strategies play vital role. Markets are created and moved by complex species – human beings and analyzing the sentiments is never an easy task. But the daily challenge is the reason why it is always interesting and keeps everyone on toes all the times!

Join US for the 2 days training workshop to be held on 11^th & 12^th October in Mumbai on the most advanced concepts of Technical analysis - Neo wave (Advanced Elliott wave) combined together with J.M.Hurst Time cycles – a powerful tool to forecasts Elliott wave patterns using Time cycles – A complete different way to look at market behavior, forecasting and trading!!!

Book your seat now!

Where and when is the course?

The training is at Hotel Grand Sarovar Premiere, Goregoan, Mumbai on 11^th-12^th October 2014. This belongs to 5 star category having chain of international hotels and the fees are including Tea / Coffee and Lunch.

Registration Fee:

The charges for the Training are Rs. 18000 + 12.36% Service tax. If registered after 20^th September 2014 charges would be Rs. 22000 + 12.36%Service tax

Registration is on first come first basis as there are limited seats.

How to Enroll?

To register for the training using either Credit Card or Netbanking visit http://wavesstrategy.com/payment/ and mention Product as “Neo waveTraining” and period as “1”

           OR

Fill in details at http://wavesstrategy.com/index.php/contact-us.html and we will get in touch with you

          OR

Write to us at   helpdesk@wavesstrategy.com /call us at +91 9920422202 /+91 22 28831358

Sensex trend this week, published in Economic Times section of Navbharat Times

Sensex can continue to trade in a range in current week!

Indian markets continued its movement in the unchartered territory and Sensex crossed 26000 mark in July. It formed 6 consecutive positive monthly close and all the bars have managed to close above the previous month’s low as well. An investor can use this simple concept of bar technique to stay in the trend as long as it continues. Looking at the candle at the end of the month and if the monthly bar manages to protect the lows of previous month the trend will continue to be positive.

Over short term we are seeing some corrective action after the index touched high of 26300. On Friday Sensex fell by 260 points and closed at 25329 levels. On downside 24900 is now an important support. In past week there was increase in Geopolitical tension that resulted in selloffacross the globe.

Indian Rupee a concern:Indian Rupee has been under pressure over past few weeks and touched the level of 61.70 in last week. The depreciation in Indian Rupee is seen across the currency pairs and is a cause of concern. Also in Global markets Dollar index that measures movement of US Dollar against basket of currencies has been constantly rising. This is also one of the reason for pressure on Indian Rupee and unless we see some stability in global markets Indian Rupee can continue to be under pressure. For USDINR, on upside 62 is going to be an important level to watch above which it might put pressure on RBI.

RBI took appropriate measures:In past week RBI maintained its status quo on repo and reverse repo rates but reduced the SLR in order to induce some liquidity in the system. This shows good approach by RBI to take care of economic growth along with fighting inflation.

Result season:The result season has been mixed so far. However, on Friday India’s largest PSU bank - SBI announced its Q1 results which was better than expected. The growth in profitability was seen for the first time in 6 quarters. This should eventually provide some support to the Banking index. Bank Nifty that measures how Banking stocks are performing has been in sideways range post Elections. Bank Nifty index has been moving between 14400 and 15740 post Election results announced on 16^th May. This shows that Banking stocks have been consolidating and waiting for some positive trigger. Overall trend remains sideways and break above 15700 is necessary for any positive trend.

Week ahead: During times of uncertainty we have observed defensive sectors like IT, Pharmaand FMCG have performed well. It is advisable to stay with these sectors for investment purposes in case we see some major correction across the Globe. For Sensex, 24900 is going to be an important support. After the selloff of Friday we can see some consolidation in current week between 25800 and 25000 levels. The medium term trend for Sensex will remain positive as long as 24270 is intact.

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