Predicting Time – Most difficult element of Trading and Forecasting!

Time is one of the most difficult elements to predict for any freely traded markets. Nevertheless, it is the most important aspect for a trader involved in Derivatives – Futures & Options.

The world looks very different in just a week’s time. Majority were worrying about rate hike in USA and now after just a week everyone has been talking about the probable delay. This has happened after US markets also moved sharply lower. Case in point is government actions are lagging indicators whereas equity markets are looking at the future and trying to discount what can happen over next few weeks or months.

Now coming back to Indian equities – the fall on Nifty from 8520 to the low of 7667 happened in mere 4 days of time. So if you would have been out during that period or exited the short positions only 2 days later it would have created strong financial and emotional impact as prices now rallied back from 7667 to near 8060 today. Aim of a trader should be to capture the most of the trend and also remember you can never capture exact low or exact top. However, if you are aware that the Time cycles are suggesting reversal is imminent when everyone is euphoric or panicking it will make a hell lot of difference!

Nifty daily chart as on 28^th August 2015 – 11:00 am

The above chart shows a Time cycle that has helped to capture not only the reversal but to alert when is the right time to exit from the existing short positions in order to make the most from the trend. Simply observe the arrows marked which are all equidistant and following a set of rule irrespective of the Global or domestic events!

Below are the excerpt picked up from the daily equity research – “The Financial Waves short term update”

Nifty was at 8370: On 21^st August morning Equity research report following was mentioned “Nifty has been moving exactly as expected and decisively broke the first support at 8425. Now move below 8338 will result into faster retracement of last rising segment thereby providing 2^nd stage negative confirmation that medium term downtrend has resumed. Avoid catching a low as the trend can be sharp and volatility can be high!”

Nifty was at 8280: On 24^th August morning Equity research report following was mentioned “In short, the trend for Nifty is firmly negative and surprises should be on downside. Follow trailing stops and ride it as long as it lasts. As mentioned earlier volatility can be high and avoid getting carried away during intraday swings. The majority of action can be over next 6 to 7 days!”

Nifty was at 7792: On 27^th August morning Equity research report following was mentioned “In short, as long as 7930 is intact on upside, Nifty can trade in range of 7930 and 7667 level. Looking at the Time cycle of 54 days and channel support, we continue to think that positive attempt is plausible in coming trading sessions but only above 7930 level.”

Happened: Nifty is now trading near 8060 levels from 7792 mentioned in earlier morning update!

The majority of action is indeed over within just a week as mentioned on 24^th August itself. This is indeed a thrilling experience even for us when we see Indian markets behaving as per predefined set of rules even when it is driven by emotions! Subscribe now to “The Financial Waves short term update” along with Monthly forecasts to get a clear direction of Indian and Global markets and understand theTIME Element which is key to a trading success!

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NeoWave Diametric pattern: Trading the collapse on Nifty!

The crash of 24th August 2015 was no coincidence. Prices have behaved exactly as they were supposed to as per the pattern.

NeoWave is an Advanced Elliottwave concept that incorporates new patterns that evolved over past few years. One such pattern is Bow – Tie Diametric. This pattern is extremely important as majority of world markets are exhibiting this structure including Indian Nifty and Sensex.

A Diametric pattern has contracting behavior in its first phase and expanding behavior in the later stages. It is a 7 legged pattern with each leg corrective in nature. Now the below will simply give you a thrilling experience which will show how by knowing the pattern can help you trade spot on. There are times when things look improbable but later we realize market behaved exactly the way it was supposed to be as per the pattern… Now see the magic of this pattern below:

Nifty Diametric pattern on daily chart: published on 5^th August 2015 in “The Financial Waves Monthly update”

Happened:

UNBELIEVABLE! Believe IT - The first chart is the snapshot from the report published with the explanation of Diametric pattern moved below the chart for understanding purpose from that report itself. It was shown in our monthly flagship research report “The Financial Waves Monthly Update”

Happened: Another chart is the actual scenario that spanned out and I was thrilled myself to see it workout exactly as per the pattern that was showed on 5^th August 2015.

Critics can continue to debate about the macro-economic turmoil and come out with logical reasoning that resulted into this collapse whereas we believe in predicting as per the pattern under formation and trying to capitalize on that rather than doing post-mortem after the move has happened.

The first image itself is a proof that was published to our subscribers of “The Financial Waves Monthly update”. And Nifty moving exactly the way it was expected is not by any chance as we have been successful in predicting the movement over past many months now.  This is just the beginning and not the end of turmoil that majority is expecting. We are no longer in BUY ON DIPS market. Few months of correction is still pending. To know what should be investment and trading strategy from here on subscribe to “The Financial Waves short term update” along with Monthly forecast to get a complete understanding of Indian and Global markets, Commodities, Gold. This works..BELIEVE IT! For subscription visit www.wavesstrategy.com or  Contact US… for more details

Ashish Kyal,CMT Nifty trading strategy and for buying Amara Raja Batteries, selling SAIL and JP Associates on CNBC TV 18

Below is the verbatim transcript of Ashish Kyal's interview with CNBC-TV18

Ashish Kyal, CMT told CNBC-TV18, "One of the stocks that we have kept in buy even in this scenario is Amara Raja Batteries . It has managed to perform very well. The stock formed higher high, higher low when Nifty and other major indices, even midcap stocks have been crashing. It managed to fall hardly and has bounced back immediately as soon as we saw recovery. So, this stock looks good and we can expect a target of somewhere around Rs 1,085 but definitely a stop loss of somewhere around Rs 960 has to be placed. In case it falls below Rs 960 then some selling pressure can suffice. So, this stock looks good from short to medium-term perspective."

" Steel Authority of India  (SAIL) is a sell. Past week, we have been constantly saying that commodity stocks doesn’t look very promising and it is sell on any rallies. The stock was consolidating somewhere around Rs 55 and yesterday it gave a very sharp move below that. Even today it touched an intraday low somewhere around Rs 47. So, this stock looks weak and the bounce back we are seeing in metal index as of now should be only temporary. It is a global phenomenon right now. So, SAIL will be a sell with a stop loss of Rs 52. So, put that stop loss, in case it crosses Rs 52 there can be deeper retracement and the target we can expect is somewhere around Rs 45 on the stock," he said.

"Everyone is aware how Jaiprakash Associates  has performed over the past few months, rather the stock has come down from maybe around higher than Rs 20 level to sub Rs 10 levels and belongs to a very weak category. So, this stock is definitely a sell. The bounce back is again temporary and the stop loss should be used somewhere around Rs 9.70. We can expect this stock to go towards Rs 7 because it has broken the important psychological levels of Rs 10 and there has been huge volume with the fall. So, I don’t see the uptrend going to be sustainable for much longer time," he added.

"So, Amara Raja Batteries looks promising on the buy side and JP Associates and SAIL should be sold off on any rallies." 
(Source: moneycontrol.com)

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Nifty: Head & Shoulder pattern breakdown with Elliott wave, Global carnage – A BEAR TREND!

Below charts of Nifty clearly shows why we have been constantly warning about the ongoing distribution pattern and downside breakdown!

In “The Financial Waves short term update” we published the following on the morning of 21^st August 2015 - “Nifty has been moving exactly as expected and decisively broke the first support at 8425. Now move below 8338 will result into faster retracement of last rising segment thereby providing 2^nd stage negative confirmation that medium term downtrend has resumed. Avoid catching a low as the trend can be sharp and volatility can be high!” BANG ON!

Below charts of Nifty clearly shows why we have been constantly warning about the ongoing distribution pattern and downside breakdown!

Nifty 60 mins chart: Anticipated on 21^st August

Nifty 60 mins chart: Anticipated on 22^nd August

Happened: as of today at 12.30 pm

Following is a gist of update mentioned in today’s morning research report following was mentioned:

“Nifty moved exactly as expected. Prices had a strong Gap down opening on Friday’s trading session and broke the level of 8338 decisively in the first hour itself. At one point of time Nifty was down by more than 140 points however there was minor pullback which was in sync with our expectations as shown on Nifty hourly chart. A breakout from the pattern usually results into retest of neckline which we can see in the above charts. Majority of sectors except the defensive space closed negative and the pressure was seen in Midcap and Smallcap indices as well.

On a weekly basis, prices have taken out the low of prior 6 bars and formed strong bearish bar.  So now as long as we do not see close above prior week’s high which is at 8530 medium term trend will remain negative.

… US –DJIA has shown strong selling pressure after months long of distribution. If the trend in Global markets is indeed reversing then we will start seeing synchronization across the asset classes. Evencurrency – INR has started depreciating sharply against other major currency pairs. The commodity crisis looks to be finally spreading across the world equity markets. We mentioned months before how sharp fall in commodities over short period of time is not good even for country like India as it results into protectionism by commodity producing countries indirectly impacting other Emerging markets.

As shown on hourly chart, the distribution pattern looks like Head & Shoulder at the top with neckline near 8338 stands broken. The downside target as per this pattern is at 8010 which is also near the range of 1.618 * wave a. So the zone of 8010 to 8050 looks crucial. (prices have decisively breached below this level as well and made a low near 7940)

Existing short positions should continue to follow trailing stop method and lower it towards............. In short, ………”

Following was mentioned on 20^th August morning research report “In a nutshell, a trending move is now due to emerge. Time cycles and various techniques are suggesting towards downside breakout. However, price confirmation will be only on close below 8425 followed by 8338. Stay alert as Nifty can come out of Hibernation very soon!”

Nifty fell drastically with a huge Gap down opening… We have prudently mentioned in our daily research report few days back that break of 8425 followed by 8338 will reverse the medium term trend on downside. Prices have now corrected by more than 400 points in just 2 days of time!

This is not the time to simply relish the unrealized gains but to ensure and follow the action very closely to get the most out of the trend… It is therefore important to understand the Elliott wave structure along with other tools like Time cycles to find out how big this trend can emerge into?

Subscribe NOW to the “The Financial Waves short term update” and get scientific & objective ways of looking at market. Avoid following the news that is lagging the market movement. These are interesting times and fall of such magnitude was previously seen only in 2008!

We are offering you this subscription so that you also enjoy the ride and alerts for 30 days before the markets starts and even before the crowd starts reacting. To know what is next - Subscribe by visiting www.wavesstrategy.com or Pricing page. For more details Contact US

Nifty – Elliott wave with Time cycles, Bollinger Bands®, OBV, MACD all pointing in same direction!

Nifty had shown a sharp sell-off in today’s trading session and also breached below the previous low of 8525.

The scenario was exactly opposite just few days back when prices rallied sharply from the lows of 8440 and gained nearly 160 points making a high of 8530. Post that there has been lot of positive news flow and majority expected that the subdued inflation data will force RBI to cut interest rates earlier than expected which will boost the equity markets. However, we refrain from commenting that a rate cut will necessarily result into positive close on markets. Infact, the top made in March 2015 at the high of 9119 was exactly on the rate cut day. Case in point: It is better to avoid basing the trading decisions on an event but rather applying the objective techniques.

Below research shows how we have combined Elliott wave along with Time cycles, Bollinger Bands, On Balance Volume (OBV), MACD indicators and majority of them pointing in the same direction. Nevertheless, Risk Management and Money Management also plays a very vital role in trading…

The below excerpt is picked up from “The Financial Waves short term update” daily research report published in morning of 20^th August 2015 to paid clients.

Bottom Line: Nifty looks to be in final stages of completing the sideways action. A trending move is now due to emerge!

Nifty daily chart:

Wave analysis:

In previous update we mentioned that “On Balance Volume (OBV) which measures buying and selling pressure as a cumulative indicator. OBV was unable to take out the pivot high…. This suggests that up move is supported by weaker hands and current consolidation can be in form of distribution pattern”

Nifty has continued to move in lackluster fashion from last 3 days. In the last session prices moved lower till 8425 level however post that Nifty managed to recover and closed at 8495 levels. The important thing to note is that prices are failing to move above the high of 8530 made on 17^th August 2015. The rise of 160 points on Monday was simply euphoric which is so far not supported by majority of the stocks that contributed during the fall. It is simply reflecting that the overall strength has failed to emerge after rise of just 1 day.

MACD indicator on the daily scale has continued to be in the sell mode. MACD line (red) has been taking resistance to the blue signal line which is the average of MACD. Each indicator has its own interpretation and during times when the direction is unclear it is prudent to applying different techniques and try to understand the direction that majority of indicators are suggesting. In previous update we mentioned about On Balance Volume (OBV) indicator which pointed towards distribution rather than accumulation. Even MACD continue to be in sell mode. A declining red line means short term moving average is approaching close to the longer moving average and a cross below 0 will give negative MA crossover.

Bollinger Bands: Nevertheless, price confirmation is going to be crucial and our expectations continue to be of downside breakout the confirmation of which will be on move below ………. This is also the lower end of the daily Bollinger Bands. The previous pivot low was also on this band. So a decisive break of this level will point towards strong trending move which is now due anytime soon!

As shown on hourly chart, (shown in actual research report published in morning) the previous pivot highs have been missed by 5 points consecutively for 3^rd time. Also, prices formed lower high and lower low as per daily bar technique. Now a close below ……… will confirm short term downside reversal providing first negative confirmation. Second stage negative confirmation as per Advanced Elliott wave will be on faster move below ……… which will indicate that the upside correction from 7940 is complete and medium term downside trend has resumed.

In a nutshell, a trending move is now due to emerge……..Stay alert as Nifty can come out of Hibernation very soon!

Today’s movement so far is clear indication of how fast a trending move can emerge. Majority might be complacent during the sideways action whereas we expected a strong trending move to emerge. It is also important to know the Elliott wave counts to understand the probable turning areas and for risk management levels.

Subscribe NOW to “The Financial Waves short term update” and look yourself various scientific and objective techniques that are pointing towards the same probable outcome. For subscription options visit Pricing Page orContact US

Ashish Kyal- Video on Nifty Elliottwave pattern, MIDCAP Stocks on CNBC TV18

Ashish Kyal, CMT on CNBC TV18 discussing midcap stocks in this volatile market environment. For indepth research using Elliott wave visit www.wavesstrategy.com Contact us at helpdesk@wavesstrategy.com or call on +91 22 28831358

How Bank Nifty is providing leading signals for turn in Nifty? Intra-market divergences!

Nifty has moved sharply lower from the highs of 8622 to the recent low of 8381. This move has happened in less than 3 days.

At times it becomes important to look at the other sub-indices apart from Nifty to understand if they are providing clues about reversal in overall market direction.

The below chart is shown in the morning research report “The Financial Waves short term update” along with detailed Elliott wave counts on daily and hourly charts.

Nifty and Bank Nifty hourly chart with divergences:

Wave analysis:

In previous update we mentioned that, “the down move from 8622 increases the odd that Expanding Triangle pattern in wave e may have completed. To confirm the same now move below 8445 is required.”

In the last session post opening near 8550 levels, Nifty quickly entered in the red territory. Throughout the day prices continued the down move and broke the level of 8445 which was the spike low made on RBI meeting day on 4^th August 2015.

From time price reversal perspective, the up move from 8320 to 8622 has taken 8 days and yesterday was the first day where prices gave negative close below the prior bar’s low. So now move below ……….. is required in next ……….. days which will confirm that medium term down move has started with Price Time reversal confirmation.

Nifty and Bank Nifty divergences: Bank Nifty is an important index that is actually leading the fall. Even the bigger top made in March 2015, Bank Nifty formed lower highs when Nifty touched new high at 9119. These divergences are visible not only on the daily time frame but also on smaller degree charts shown above. We can clearly see that Bank Nifty has been constantly providing important negative divergences when Nifty breaks above previous pivot high but Bank Nifty failed to do so even this time.

The above chart also shows one positive divergence when Nifty broke the pivot low but Bank Nifty managed to form higher lows.

These are important indications but have to be combined along with other techniques like Elliott wave and Time cycle. Nifty has now broken important support levels and that too in faster time so far…. Most of the technical indicators are again aligned together after many weeks of sideways action.

To know more on the short to medium term direction of Nifty along with stocks and why we think a trending move is due to emerge using different independent techniques and combining with Time cycles, subscribe to the “The Financial Waves short term update”. For subscription options visit the Pricing Page or Contact US for more details.

Video: Nifty trading strategy and Midcap Stock recommendations on CNBC TV18

                         

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Nifty trading in Extracting Triangle or Expanding pattern? Irrespective of RBI Policy

RBI maintained status quo on the key policy rates.

Nifty has continued to move in a range irrespective of the policy announcement.

Extracting Triangle: This pattern is defined in Neo Wave – Advanced Elliott wave that takes the category of a triangle but does not necessarily look like an orthodox triangle pattern. This pattern as the name suggests extracts the power from the up leg (during upside correction) and the downside move gets stronger i.e. during an up move in form of Extracting triangle wave e < wave c < wave a whereas wave d > wave b.

Now look at below chart of Nifty which so far looks like an Extracting pattern. However, this is our assumption by looking at Time cycles that the pattern under formation will probably form an Extracting Triangle.

Nifty 60 mins chart:

The above chart with detailed explanation is published in the daily research report “The Financial Waves short term update” For detailed explanation and key levels subscribe to this report. Following is just an excerpt from the same:

Yesterday major buying was seen in Midcap and Smallcap stocks that continued to show outperformance over past few days. Banking stocks were among the top gainers before RBI policy meet today. It is expected that the key rates will be left unchanged. During an event closing price becomes important.

As shown on daily chart, 200 days average continue to move ………

As shown in 60 min chart, from the lows of 8321 prices bounced on upside and still running its course. Yesterday positive close was witnessed in this index but today’s close will be important after the policy announcement which will be probably kept unchanged. Momentum from here on will be crucial to watch as prices have now retraced the down move which started from the highs of 8654 to the lows of 8321 by almost 76.4 %. As per wave perspective, wave e of extracting triangle is still ongoing and the maximum allowable limit for this pattern is till ………….

In short, ……….move below 8410 will be first sign of exhaustion. Also we normally see a trending move about 30 mins after the policy announcement. Let us see if RBI acts as a reversal trigger like previous instances irrespective of rate cut or not or it results into a non event!

To know the key levels that will decide the reversal zone along with Elliott wave structure of stocks subscribe to “The Financial Waves short term update”. For subscription option visit the www.wavesstrategy.com or call us on +91 9920422202/+91 22 28831358