Nifty Time cycles, Channels, Elliott wave and Momentum!

Bottom Line: Bank Nifty managed to touch new highs but Nifty is still consolidating within the range. We are approaching close to the 49 days turning cycle.

The below research is an excerpt picked up from the daily report “The Financial Waves short term update”. A few parts have been removed purposely and so below research should be used only from educative purpose.

It has been 5 days in a row since Nifty has moved within a range and sideways action. Prices are now approaching close to the 49 days cycle which acts as important turning date. As of now it is difficult to conclude that the turn will be from sideways to upside direction as happened in August 2014 or will form a top and start the downtrend. To get more clarity, we can apply a 14 days’ Time cycle that forms important lows. This is coinciding with the 49 days cycle and indicating that there can be push on upside for 4 to 5 trading days and then……

Similar price action was seen in August 2014. This scenario is also in sync with the short term wave counts that probably wave ……. is pending but the momentum and breadth will remain subdued during this ……….

Nifty daily chart:

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“The Financial Waves Monthly Update”is now published. The current research focuses on Understanding 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 ForecastandOutlook on USDJPY and JPYINR

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Chart courtesy: icharts

NSE Net monthly High – Lowschart shows the number of stocks that are touching new monthly highs. We can clearly see that the high made in May 2014 is not yet reached which was seen during the formation of wave iii of c of y– the area of maximum acceleration. This is also considered as negative divergence as prices have reached new highs but the number of stocks reaching new monthly highs has been constantly reducing. This is a different representation to measure the overall momentum in addition to the breadth indicator we showed before.

The sentiments turned extremely positive during the up move from 7730 even when the majority of stocks failed to show momentum and did not move strongly on upside.If this would have been a new bull trend then different indicators based on different parameters should not be giving the divergence signals.

As shown on 60 mins chart, ….. (shown in actual report)

In short, failure of net monthly – high lows to reach the previous levels, Time cycles, Elliott wave counts are all in sync that we are nearing an inflexion point!!!

To know why we have entered into crucial month and it is time to stay alert rather than complacent like majority. This is time to take a stand apart from the crowd. We can be wrong but it is not worth the risk if prices indeed turn the way various indicators are pointing. The setup is near completion and we will alert in our daily research when it will be time to pull the trigger!!! For subscription to this daily research select “The Financial Waves short term update” from the following page http://www.wavesstrategy.com/index.php/store.html