Tuesday, August 19, 2014

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 13th August 2014 in morning before equity markets opened when Nifty crossed 7710 level!
Nifty 60 mins chart: 
Following was mentioned on 13th 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 8th 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 14th 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 18th 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 1sttarget 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.

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