Friday, November 7, 2014

Indian equity market: Why is market breadth still below its peak seen in July 2014?

Nifty has continued to consolidate post the Hurst Time cycles and path we showed on 3rd November.
On Wednesday as well prices opened with a Gap up of 25 points but closed it on intraday basis and traded within the range of 8365 and 8324 levels. Metal sector continued to remain strongly under pressure. This has happened post the selloff seen in Global precious and industrial metals.
The CRB index that measures the strength of world commodities has already broken below crucial levels that are highlighted in current issue of Monthly update.
Chart courtesy: icharts

“The Financial Waves Monthly Update”is now published. The current research focuses onUnderstanding the Global phenomenon: The month of October witnessed huge volatility across the Global markets. It becomes important to look at the Global charts from across the continents to understand how each of these equity markets has fared. Bank Nifty outlook, CRB Index forecast,Sintex Industries Long Term Forecast and Outlook on USDJPY and JPYINR
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Nifty 60 mins chart:                                                                
Wave Analysis:
As shown on the daily chart of Nifty, prices have now reached close to the upper red and black channel. Please note, as the channel is upward sloping the resistance of the same will keep shifting higher with each passing day. For now ……. has become a crucial level to watch.
We are showing Nifty Advance decline ratio that measures the overall breadth of the markets. It is providing very important clues to the momentum and strength in broader market. We can see that the red line (AD Line) has already topped out in the month of July 2014 and has formed lower highs and lower lows. The current level is still way below the highs of July even when Nifty is moving in unchartered territory. A turn back down in AD line will be again a negative confirmation. However, if the momentum starts increasing and more number of stocks start participating from here on then this indicator will lose its validity. As of now it is acting as a warning sign but …….
In short, expect Nifty to trade sideways between the range of 8250 and 8420 for few days. If the breadth starts deteriorating from here it will synchronize our existing wave counts and Time cycle turning dates.
Indian equity markets have arrived near crucial juncture. The indicators are getting aligned together. However, prices are yet to confirm but nevertheless it is wise to be alert rather than complacent exactly at the time its needed most. To know the short to medium term forecasts and path of Nifty over next few weeks subscribe “The Financial Waves short term update” and to know the long term forecasts on Global markets with Commodities get access to “The Financial Waves Monthly update”. For subscription options visit or contact us at +91 9920422202 / +91 22 28831358

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