Webinar: How to plot Channels, Fibonacci, Cycles on Charts!

#ElliottWave news channel is a short video series. Ashish Kyal of http://www.wavesstrategy.com/ will be going live weekly at 4 pm every Friday. Stay tuned to know the current technical state of markets and learn more on advanced concepts of Elliott wave, #Neowave and #TimeCycle

Get access to daily Equity, Commodity, Forex research reports using Elliott wave, Time cycles, Advanced Technical analysis concepts. For more details visit www.wavesstrategy.com 

Nifty revisiting crucial 49 days Topping Time cycle, Neutral Triangle pattern!

Bottom Line: Nifty has been fluctuating between alternate days positive and negative closes. Expect sideways action to continue unless crucial levels break!

Nifty daily chart:

Nifty daily chart: 49 days Time cycles

Nifty 60 mins chart:

Wave analysis:

Nifty continued to oscillate between important levels and managed to bounce back on previous day from the important channel support. Participation was seen from underperforming stocks like Axis Bank, Tata Motors which were among top gainers. Nifty had a Gap up opening near 9080 and post that prices traded in a narrow range of 30 points. Majority of sub-indices closed in positive territory. The movement was exactly opposite to that seen on 27^th March. It seems the trend is reversing in every two days.

Time cycle of 49 days: It has been sometime since we visited this Time cycle. We have been following this cycle for many years but it lost its importance for a while during strong trending move of 2014. Nevertheless, post March 2015 this cycle has worked very well for catching important tops irrespective of all the euphoria preceding the fall. Infact, the top made prior to Demonetization was also captured by this cycle. As shown on the second daily chart the important tops as per this cycle is marked on the chart. The high made on 17^th March 2017 at 9218 was exactly on this cycle day and it becomes extremely important to pay some heed to it now. As per this cycle, the high at 9217 might remain protected for few months. Let us see price action over next few days from here on for further confirming validity of this cycle.

Moving average difference Indicator: At times non bounded indicators provide subtle changes or divergences which the bounded indicators like RSI might not able to amplify. We can clearly see that Price Oscillator indicator that measures differences between two Moving averages has formed a lower high when Nifty touched 9218 levels. This is another reason why we think the momentum on upside is reducing. At the same time the channel slope has changed from blue to black thereby further suggesting reduction in the speed as shown on first daily chart.

Neutral Triangle pattern: The overall structure looks like a Neutral Triangle pattern post wave x and currently wave e of the same is ongoing. This wave e is the final leg of up move which should produce series of divergences and result into distribution. Bollinger Bands have now turned flat with upper end of the band lying near 9140 levels. So let us see how far wave e can stretch from here on.

Price confirmation awaited: As Nifty managed to bounce back from short term channel support and protected the lows of 9018 the near term trend will remain positive unless and until we see close below this level. Price confirmation takes precedence over Cycles and Indicators and we will get negative confirmation only on break of 9018 levels. However, when supporting indicators that has worked well in the past starts to get aligned again it is time to stay alert and not complacent like majority who are expecting strong trending moves further from here.

In short, trend for Nifty will be sideways within a range of 9160 and 9020 levels. We can expect minor positivity to continue as long as crucial support near 9020 is protected. However, momentum indicators with Time cycles and Neo wave application is suggesting the uptrend is currently in matured stages and next few days of price action is very crucial!

Subscribe to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.

Rajya Sabha TV - UP Election impact on Markets!

Ashish Kyal in an interview on Rajya Sabha TV - UP Election impact on Markets with Govindraj Ethiraj.
Get access to daily Equity, Commodity, Forex research reports using Elliott wave, Time cycles, Advanced Technical analysis concepts. For more details visit www.wavesstrategy.com 

Where Nifty is headed? Application of Andrews Pitchfork Channel, Elliott wave, momentum, bar technique!

 

Understanding the trend of Nifty with the application of basic as well as advanced technical likes Elliott wave, Andrews Pitchfork Channel.

Why we were alert when Nifty arrived in the zone of 9150-9200?: Post the UP Elections results Nifty had sharp Gap up opening and took out the psychological mark of 9000 in the session of 14^th March 2017. After the same buying spree continue in Nifty towards 9150-9200 level. This was the time when majority were extreme bullish and you may have seen many buy calls on Nifty on news media. At the same time our in-depth research technical tools were suggesting us not to be complacent but alert.

In our flagship product “The Financial Waves Short term Update” dated 17^th March 2017 we showed Andrews Pitchfork channeling technique on Nifty to our client. At this time prices were exactly lying on the channel resistance from where risk reward on upside was not favorable. (HDFC Bank: Concept of RSI smoothened by Moving average!) Imagine what would have happened next? Prices formed spike above the channel and entered again into it which provided the first weak sign. Since then Nifty has continued to move lower. Such techniques can help us to avoid financial as well as mental loss.

Nifty 60 mins chart:

 

Nifty 60 mins chart: (Happened till now)

Wave analysis:

Part of research taken from 17^th March 2017: On hourly scale we are showing Andrew’s Pitchfork channel. The center line is the median trendline with two equidistant parallel line. This is more systematic way of drawing a channel as it takes into consideration the median prices. Coincidently, this channel is also in sync with our previously drawn parallel trendlines. Yesterday’s close is exactly on this line and so if price action from here on is going to be crucial.

Part of research taken from 20^th March 2017: Prices violated the channel resistance in the first hour however post the same it has again entered in to channel. Such action happens when the rally is in matured stages.

The above research clearly indicates our cautious tone based on Andrew’s Pitchfork channel as well as momentum indicators. Post the publishing of this, Nifty has moved lower from 9219 to 9040 level till now. So what should be the trading strategy now?

Subscribe to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.

Nifty sharp rise post UP Elections 2017 but prices at upper channel level!

UP election outcome looks like repetition of 2014. BJP's landslide victory in UP clearly suggests strong hold BJP now has over majority of the states which makes their position very strong for the central elections in 2019. Modi wave looks to be stronger than before and post Demonetization this showcases increasing faith people are showing in him. This definitely puts forward for stronger growth over years to come and uplifts the positive sentiments. This time as well the rally started well before the election outcome but what is going to be crucial is the Gap area that should remain unfilled. India is probably headed for exponential growth from long term perspective

 

In 2014, post the result announcement, Nifty had a huge Gap up opening but prices started to fill the Gap during the day. Later, Sensex entered into red territory even though temporarily on the same day. It will be important to see if such repetition of events results into similar outcome during the day. 

Exit polls released on Thursday was already hinting towards BJP victory in UP but that did not result into any major movement on Friday. It seems reliability on exit polls is on decline. This created a tricky situation on Friday for traders as it was absolutely unclear which way markets want to head.  

Now look at the below chart which shows important channel on an hourly scale.

Nifty 60 mins chart:

In the morning Equity research report we mentioned the following:

“As shown on daily chart, prices are moving below the lower trendline of the channel. Let us see if prices can now move back above this trendline resistance and close above it. The resistance is near 9100 - 9120 levels as of now. However it will increase with each passing day. 

Over short term we will continue to keep the existing wave counts intact with wave …….. of Diametric pattern currently ongoing. The equality of wave …….. with that of wave a comes to about 9090 levels for now but movement on back of event outcome can result into short term euphoric rise. During such times day's closing becomes extremely important.”

Now look at the above modified channel which highlights how precisely prices are contained within this channel. Today’s high post opening was exactly on the channel resistance at 9122.75 mentioned in the morning before markets opened.

This only shows power of one simple technique which is the most basic fundamental even to Elliott wave – Neo wave analysis. Analysts following advanced methods tend to ignore the lifeline and foundation of technical analysis which can result into disastrous outcome. So even if you do not use any other methods but follow one simple trend following method like Moving averages shown above on 60 minutes chart along with channels it gives very important trigger for entering or exiting the trades irrespective of the event!

Detailed analysis and trading strategy post the event will be published in tomorrow morning’s research report – The Financial Waves short term update

Attend the most advanced training on Elliott wave – Neo wave, Time cycles and combining it with basic technical analysis for high conviction trade setups in Mumbai scheduled on 18^th and 19^th March. Also get free access to research products and online access to basic Elliott waves before the training itself. Limited seats left… Enroll NOW!

Webinar: Nifty Time cycles and its importance with Neo wave!

#ElliottWave news channel is a short video series. Ashish Kyal of http://www.wavesstrategy.com/ will be going live weekly at 4 pm every Friday. Stay tuned to know the current technical state of markets and learn more on advanced concepts of Elliott wave, #Neowave and #TimeCycle.

Training on Gann / Hurst’s Time cycles, Neo wave combined with basic Technical analysis – Attend the two days workshop on 18^th and 19^th March 2017 that will focus on how to derive trades based on above techniques. This training will initiate you towards different aspects of Technical analysis methods along with practical charts across time frames. Post the training get access to Free research reports to ensure the learning is ongoing with ability to share across charts on our Discussion forum and closed groups. Limited seats left.. This can be one of the most prudent investments! Enroll for Most Advanced Technical analysis training.

Nifty: Revisiting Hurst’s Time cycles with Neo wave! Why basic technicals are equally important?

Time cycles are different study within Technical analysis that helps to understand the overall maturity of trend along with key reversal days. It focuses on timing the market can also be used for price projections.

Like any other indicators we use Time cycles as a secondary confirmation to prices. The reason being Time is a challenging element and is more accurate capturing lows rather than tops. Nevertheless, it still gives us some sense of indication if we are within the topping zone. 

For price forecasting we rely largely on Neo wave concepts – Advanced Elliott wave. If the pattern under formation is clear then it is thrilling experience to see each and every movement as per the assumed pattern. The challenge arises when prices start deviating from the assumed pattern hinting that some other structure is probably forming. It is during this time we have to fall back upon the classical technical analysis methods and trend following systems like Bar techniques, RSI and Moving averages.

Now look at below chart for understanding Time cycles:

Nifty Neo wave plot:

The first chart shows bottoming Hurst’s Time cycles. This cycle has worked very well capturing important lows. We try to use this cycle to look at the tops occasionally but unless there is price confirmation capturing a top in a trending market can be tricky. Nevertheless, cycles normally enters into topping zone in their second half. This cycle has now entered into its second half zone so we are not complacent like majority but alert. This does not mean one should go on shorting the market but it is just helping us to stay aware so that there are no negative surprises.

Neo wave plot: Now this is important chart shown above which is plotted as per Neo wave. Please note the time scale is missing because the plot is different than normal Line charts or Bar charts. The internal counts are marked on this chart with Diametric pattern followed by wave x then a Zigzag again wave x (refer Fractal Nature for wave x) and now again a Diametric pattern is assumed. In case prices start deviating from the expected outcome we will then have to look at other possible patterns but until then we will assume this is the structure under formation. Also these counts are in sync with the Time cycles shown above.

Price and Time confirmation is the key to trading success! Majority of the traders try to pre-empt the moves even before confirmation and then they point towards inefficiency of the theory. Please understand when the structure is unfolding we are assuming and identifying it with a pattern that looks probable. Therefore we have to wait for break of support or resistance levels along with Moving averages and Bar techniques before finally pulling the trigger on the short or long side. Detailed discussion on key reversal areas with levels that will determine the medium term trend are mentioned in our daily research report – The Financial Waves short term update

Training on Gann / Hurst’s Time cycles, Neo wave combined with basic Technical analysis – Attend the two days workshop on 18^th and 19^th March 2017 that will focus on how to derive trades based on above techniques. This training will initiate you towards different aspects of Technical analysis methods along with practical charts across time frames. Post the training get access to Free research reports to ensure the learning is ongoing with ability to share across charts on our Discussion forum and closed groups. Limited seats left.. This can be one of the most prudent investments! Enroll for Most Advanced Technical analysis training.