Friday, November 14, 2014

Nifty: Path ahead using Time cycles with Elliott waves and understanding maturity of trend!

Nifty has moved exactly as expected as per path shown on 3rd November 2014. 
Prices have been moving in sideways correction instead of downside and now retesting the crucial levels. The forecasts shown below are done using the advanced concepts of Technical analysisTime Cycles and Elliott wave theory on 3rd November 2014 – the very next day when index managed to move up by nearly 150 points in single day.
It requires strong belief in techniques that has stood the test of time to predict a correction after strong positive sentiments and gain of 150 points i.e. nearly 1.8% gain in single day.
Now let us go back in time and see the below chart with Channels, Time cycles and Elliott wave counts:
Anticipated on 3rd November 2014 morning research report:
 Happened as of today:
On 3rd November 2014we mentioned that “Now let us look at Nifty from Time cycle perspective:
Hurst Time cycles: are shown on the daily chart that highlights the probable turning junctures. Cycles help us to capture the Time element whereas Neo wave & Elliott wave helps us to understand thePrice projections. At times when prices are moving in complex corrections projecting price with high degree of accuracy is a challenge.
Projecting Time using Neo wave:  One very important pattern described in Neo wave (Advanced Elliott wave) is Diametric pattern. This pattern consists of seven corrective legs (labeled from a to g) and each leg tends to follow equality in terms of price and / or time. The blue box shown on daily chart shows except the first leg that was driven largely by election event, each of the up leg has been tending towards equality in terms of price and time. This when combined with the crucial red channel coincides with the upside range for the current rally as 8350 to 8420. In a nutshell, the probable path is as shown based on Neo wave and Hurst Time cycles but it is prudent to stay in direction of the trend which is currently positive and use 8198 as stop level. On upside, 8350 to 8420 is the next resistance range!”
Happened: Looking at the above chart, one might think that the movement was not on the downside but sideways. Please understand that sideways action is also a part of correction and can be more dangerous. Trading within the sideways action can result into not only financial but emotional loss as well. It makes the trading environment boring and eats up the patience for someone who entered after the rise of 150 points just to keep watching index for sideways action for nearly 8 days in a row. The high made by Nifty within this range is at 8415. This is exactly at the zone we have mentioned in start of November.
Path ahead:
However, by simply knowing beforehand that a correction is plausible whether sideways or downside one can save lot of Time andemotional energy along with possible financial loss.
The above chart does not require much thought process for someone who understands even the basic concept of Channels and trendlines.
To know why it is time to be alert and prudent to be back from short vacation during correction subscribe to “The Financial Waves short term update” along with the long term forecasts in ourMonthly updateOffer: the short term update for 3 months and get the Monthly research report FREE. It is time to act as we do not reach such junctures very often!!!


  1. It is making sense to combine Elliott Wave Principles with time cycles. When Every body is expecting big correction, your analysis still indicating upwards direction of move. As Nifty already crossed above square and also near resistance line, Does it indicate that correction is near ? I will appreciate and will wait for your reply.

    1. It is prudent to wait for either the upper channel trendline to break decisively for resumption and extension of current leg. There are divergence on indicators which is a warning sign but prices are yet to confirm. Avoid catching a top untill prices confirm

  2. Hi Ashish

    Very useful analysis. Can you share the extent of estimated correction once this final upmove concludes


  3. Hi Akhil, It is better to wait for market to prove the start of correction by breaking crucial levels. Unless we see close below 8290 it is better to avoid catching a top here. The nature and momentum of first few days of correction will help us to gauge the downside projection..