Nifty trend- What is next post GST?

Look at what should be Nifty trading strategy post GST? Also see various technical analysis methods like Channels, RSI, Elliott wave applied on charts of Nifty.

For more research updates register at https://www.wavesstrategy.com

Is Nifty in danger zone? Technical analysis applied with Elliott wave

Nifty is flirting at very important level from technical analysis perspective. Refer Elliott wave channel for more videos

Elliott wave pattern, Time cycles, Channels, indicators, most of the advanced concepts are all getting aligned together.

"The Financial Waves short term update" is our flagship research report that shows detailed technical analysis using Elliott wave and other advanced concepts and indicators. Subscribe NOW by visiting www.wavesstrategy.com

Bank Nifty: Amazing predictable movement as per Neo wave - Diametric Pattern!

Neo wave and Hurst’s Time cycles have helped to capture the movement on Bank Nifty precisely. Here is the research that will give complete insight into this index.

Before trading or investing in any asset class it is important to understand its market behavior and structure. This will help in managing the risk factor to survive in any market for traders. Nifty has continued its uptrend and is now trading near the level of 9700. You might want to also have a look into a very detailed analysis on Nifty Hurst’s Time cycles

The major support in this rally has been witnessed from the Bank Nifty which has moved higher from 23311 to 23890 level in last few days. Bank Nifty has continued to follow Neo wave pattern along with basic technicals very well.

Bank Nifty daily chart:  (Application of Time Cycles for capturing lows)

Bank Nifty 60 mins chart:  (Anticipated in the morning of 19^th June 2017)

Bank Nifty 60 mins chart: (Happened till now)

(Below research is taken from “The Financial Waves Short Term Update”)

Wave analysis:

“Bank Nifty and Nifty both these indices have been moving in corrective fashion on downside from last few days. This sideways to negative action has brought prices at the important juncture and price action of next 1 or 2 days is going to be vital.

(Weekly chart has been removed purposely which is shown in research report), the up move started from the beginning of 2016 is corrective in nature which is intact in black upward moving channel. As per this black channel prices still have more room to cover on upside. As of now there is no break of crucial support levels which is going to keep trend on positive side. 10 weeks EMA is proxy for the same which has provided support in the entire uptrend. After the consecutive of up move of 7 weeks, in the last week prices have taken out the low of prior week however in the end it managed to recover. This has protect the low of prior bar on closing basis and any move above 23620 will suggest that trend has started on upside.

As shown in daily chart, here we can see that double correction pattern is under formation in which second correction is forming Diametric pattern. Last few days of price action is in form of wave f of pattern and post the same upside trend should start in form of wave g. Time cycle of 20 days is working well which has formed important lows in the past. The same cycle is due in current week and prices are at the channel support along with 20 days EMA. Hence sharp up move cannot be ruled out.

As shown in 60 mins chart, the recent sideways action resembles the earlier downward correction and post which sharp upside trend was witnessed. Now move above 23620 level will indicate that next leg on upside has started in form of wave g.

In short, Bank Nifty has arrived at channel support. Move above 23620 will take prices towards …… or higher levels where channel resistance is placed.”

Happened: Post taking out 23620 level, Bank Nifty has made high at 23890 level till now and it has been reaching towards the our mentioned target level.

The above research clearly indicates that advanced technical tools combined with basic techniques have continued to work well to capture the short to medium term trends. Get your copy of “The Financial Waves Short Term Update” which covers Nifty and 3 stocks with Elliott wave and important levels.

Attend the Most advanced training EVER on Technical analysis – Elliott – Neo wave combined with Hurst’s / Gann Time cycles to understand and pin point the reversal areas with strong confirmation using two stage confirmation techniques that virtually guarantees that the ongoing trend is over. For details about this two days seminar visit – Most Advanced training on Technicals

How to use bar technique for short term trading?

This video explains on how to use simple technical analysis methods like Bar techniques for trading.

This is Elliott wave webinar by https://www.wavesstrategy.com

Subscribe Here for periodical updates on Elliott wave, Neo wave, Time cycles structure of Nifty, Stock Tips and Global markets. For any queries contact us at helpdesk@wavesstrategy.com or call us on +91 9920422202

Nifty Hurst's Time cycle and Neo wave pattern!

Bottom Line: Nifty managed to sustain the Gap of 19^th and trade in a range in previous session. This will keep the short term trend positive with 9560 as very important support.

Nifty daily chart:

Nifty 60 mins chart:

Wave analysis:

In the previous update we mentioned that,“Nifty has given upside breakout from the downward moving channel of last 9 days which suggests resumption of up move. 9560 is the crucial support level”

Nifty had sideways action in yesterday’s session and prices oscillated between 9676 and 9643 levels. The Gap of the prior day had been protected so far which will keep the short term trend positive as long as 9560 level is intact. The top gainers across the sectors were Tata group stocks and it seems that fresh momentum can be seen in the group companies given a synchronized move.

On daily chart, you can see two very important moving averages – 20 days and 5 days Exponential Moving average. Since the trend started from the lows of 7900 levels in December 2016, the shorter blue moving average has managed to sustain above the red moving average. Whenever the distance between the blue and the red averages reduces it provides good opportunity to trade in the direction of the medium term trend which is on upside. Even recently the blue moving average came very close to red one and prices have reversed back. This will keep the trend positive as long as we do not see decisive break of blue line below the red. This is one of the simplest trend following method.

Given the above and looking at maturity of trend, position sizing is important and Time cycles are helping us to understand that. As the cycles still remain in sell mode atleast till 1^st week of July it is prudent not to leverage much and use a strict stoploss levels. Booking partial profits as soon as possible and trailing the remaining with prudent stoploss is best method to use to ensure squeezing the most from ongoing trend.

In short, trend will remain positive as long as 9560 is intact but at the same time one should keep position sizing under check to ensure risk is less in case of adverse movement. At times it is better to stay cautious with lesser number of positions when all the indicators are not in sync and we will highlight it here when the majority of indicators get synchronized again for going in with full capacity. As of now stay long and use 9560 as very strict stoploss with less leverage.

Subscribe NOW and see yourself detailed analysis on Nifty and how precisely markets are moving!

Register for the Most Advanced training on Technical analysis – Advanced Elliott wave, Neo wave combined with Hurst’s Time cycles and Gann cycle analysis. These techniques will equip you with tools that can help in increasing the trading or investment accuracy. Also get insights into lot of practical charts with applied studies and get access to free research reports post training. This can be one of the best investments, Limited seats – Enrol Now  

Nifty: Hurst’s Time cycles and its pressure on markets with PE ratio!

Time cycles is an independent study in Technical analysis which if applied prudently can help to pin point turn to the day or probably to the hour.

We combined Advanced Technical analysis concepts like Advanced Elliott wave, Neo wave and Hurst’s Time cycles with Gann projections to derive high probable trade setups and the path markets can follow.

Now look at the below chart of Nifty which was published in our Monthly research report on 6th June 2017:

Nifty Gann projections and Time cycles chart (data as per 6th June 2017)

Happened so far

Nifty PE ratio

Following is part of the research from Monthly research report

Time cycles: In figure 5, we have shown Time projections along with Gann price projection. As per Time cycles prices have entered into the topping zone again and is now ……. days old within the 55 days cycle. Therefore the pressure can start building up on downside after few days as per cycle analysis. However, we know time is a dynamic element and prices can stay at elevated levels………… So break below …….. will be 1st level of negative confirmation…

Indian Equity markets valuations: At times it is important to look at certain parameters which provide information about how expensive the current market is.  Price to Earnings ratio (P/E ratio) is widely used fundamental parameter to evaluate the current price with respect to earnings of that asset. We can see in Figure 6 the PE ratio of Nifty. For us PE ratio can be classified as technical parameter as well. Any PE reading will make sense only when it is compared against its average of past decade. We can clearly see that for Nifty the PE average had been at 19 against which Nifty is currently trading at the PE of 25. Also we can see that important tops are formed when Nifty PE crosses above the 2 standard deviation from the average. We can clearly see that the top of 2008, late 2010 was formed when PE ratio crossed above 25 mark. It is not very often to see Nifty PE entering into such zone and when it happens it is time to stay alert and avoid fresh investments unless the earnings catches up with the prices. Even for Earnings to improve prices should stay where they are for a few quarters so that the PE ratio can come down. This means that there should be atleast time correction if not much of price to improve this fundamental parameter. Let us look at the PE ratios of other few important sectors and see if this euphoria is more prominent in those indices.

The above research only shows Nifty valuations. In the actual research report –The Financial Waves short term update you can see the valuation parameters on Bank Nifty and Midcap indices as well that are at never seen before levels. Not only that there is very detailed explanation on Neo wave analysis along with preferred scenario from medium term perspective with outlook on Global markets, EURUSD, stock pick of the month and much more. Subscribe NOW and see yourself detailed analysis on Nifty and how precisely markets are moving!

Register for the Most Advanced training on Technical analysis – Advanced Elliott wave, Neo wave combined with Hurst’s Time cycles and Gann cycle analysis. These techniques will equip you with tools that can help in increasing the trading or investment accuracy. Also get insights into lot of practical charts with applied studies and get access to free research reports post training. This can be one of the best investments, Limited seats – Enrol Now 

ICICI Bank: Combination of Elliott wave, Time Cycles, Trendlines, Channels, MACD!

Technical analysis applied on stocks – ICICI Bank. The below research shows application of Elliott wave, Time cycles, Channels and MACD.

Stock market exhibits the cyclical nature and to understand the same we apply different Time cycles to know if important top or low is in place or not. As per Hurst’s Time cycles, capturing the low can be easier than top as distribution process takes time and hence validity of cycles can be in question.

Nevertheless we follow normal cycles also which works well on particular stock or index. Below we have shown example of ICICI Bank which is taken from “The Financial Waves Short Term Update” which was published in today’s morning report. Here we have shown 69 days Time cycles which is working as topping cycle since April 2016.

Isn’t it interesting to see that how precisely this stock is following time cycles?  

ICICI Bank daily chart:

(Part of research published today morning)

Wave analysis:

“Stocks like Axis Bank and ICICI Bank has been moving in non trending environment from last few days. Looking at the short term structure of these stocks and failure of Bank Nifty to generate the upside momentum, there is high probability that distribution might be under process. However it is better to wait for price confirmation which will guide the trend ahead.

As shown in daily chart ICICI Bank, it has been trading in expanding structure since April 2016 and from last few days prices are moving in the range as it has tested the important trendline resistance. Along with this, Time cycle of 69 days which has formed crucial tops and this time also cycle looks to have worked well as prices have not taken out resistance area. MACD is already showing negativity as it has given sell signal. Now break below pivot low will confirm that downside trend has started.

(60 mins chart is not shown here which shows internal wave structure)

As shown in 60 mins chart, prices have till now completed double correction pattern and post that some pressure has been witnessed in last few sessions. The current downfall has broken the channel support and move below …… will indicate that retracement on downside in form of minor wave … of third standard correction has started.

In short, ………….

Elliott wave, Time Cycles and other basic technical concepts can help traders to form trading strategies with prudent risk reward ratio. Get your copy of “The Financial Waves Short Term Update” which covers in-depth research on Nifty and 3 stocks on daily basis.

Most Advanced Technical analysis training EVER – Nifty has arrived at important juncture and despite majority turned bullish prices have not headed anywhere over past two weeks. This looks like a classical case of distribution. During such times it is prudent to learn the methods and indicators that help us to time the turn and capture the trend when it is just starting. Learn Elliott – Neo wave combined with Hurst’s time cycles and Gann analysis. I will be discussing various methods I personally follow to derive at trading decisions. Training is scheduled on 29th – 30th July 2017. Know More

Webinar: Is Nifty headed for sharp reversal?

In the current webinar you can see why markets continue to trade in the topping process. Detailed analyss is shown using Hurst's Time cycles, Channels and Elliott wave - Neo wave perspective.

"The Financial Waves short term update" is our flagship research report that shows detailed technical analysis using Elliott wave and other advanced concepts and indicators. Subscribe NOW by visiting www.wavesstrategy.com

Sensex in US Dollar! Is it reflecting a true picture?

Understanding the medium to long term trend of Sensex in terms of US Dollar i.e. looking at S&P Dollex 30 index with Elliott wave and trendlines!

Do you know how much returns Sensex has provided in Dollar terms since 2008? The answer is “no returns” if investors would have invested at the high of 2008. As against to this Sensex and Nifty in Indian Rupee is trading way above its high made in 2008. So let us understand “S&P Dollex 30 index”. Below part of research is taken from “The Financial Waves Monthly Update” which is published in the first week of the month.

Sensex in US Dollar terms - S&P Dollex 30 index Monthly chart

Published in the monthly research -

“The S&P BSE Dollex 30 is the USD version of the BSE SENSEX, India's most tracked bellwether index. Dollex-30 is the Bombay Stock Exchange's Sensex Index quoted in U.S. dollars. The BSE introduced Dollex-30 on July 25, 2001. Except for the Dollex indices, all other BSE indices reflect growth in the market value of their constituent stocks in Indian rupees.

With increasing inflows of foreign direct investment (FDI) and as Indian equity markets integrate rapidly with global capital markets, the Dollex indices take into account currency fluctuations to show Indian growth in dollar terms. They are international benchmarks for the Indian market and reflect changes in both stock prices and exchange rates. As a result, they are useful to foreign investors looking to measure the "real returns" of their investments in the Indian market.

The Dollex indices are calculated at the end of each trading session by taking considering the day's rupee-dollar reference rate as announced by the Reserve Bank of India (RBI).

Now let us look at the trend of BSE Dollex 30 from Elliott wave perspective: In the year of 2008 this index formed important top and completed the up move which was ongoing since 2003. Post the same prices are trading in Triangle pattern which has not yet taken out the high of 2008. As against to that, Sensex and Nifty is trading way above its high made in 2008. This suggests that in terms of Indian rupee, Sensex has performed well whereas in terms of US Dollar, still this index is moving in no return zone since 2008. In the year of 2015 intermediate wave D completed its course and since then intermediate wave E is ongoing which itself is forming Triangle pattern. The rally witnessed in last on year is in form of minor wave (b) which is near the B-D trendline. As per rule of Triangle pattern, no part of wave E should violate ……….

RSI Observation: Here we can see that RSI is moving in a range of 70 and 30 levels from last 8 years. Post the recent rally, RSI has again arrived at resistance zone and hence momentum from …….

In short, S&P BSE Dollex 30 has arrived at the important juncture. This index has still not taken out high of 2008 as compared to Sensex and Nifty which suggests underperformance. Hence any move below 3600 will continue the sideways to negative action before the meaningful low is formed. However any move above 4400 will indicate that Triangle pattern has completed its course in the mid of 2016.Isn’t it interesting to see that in USD terms investors did not make any returns for more than 8 years despite all the euphoria we are seeing in Sensex in INR terms!!!”

The monthly research report is now published. This report shows overall trend of Nifty applying  Neo wave, Gann Projections, Hurst Time cycles and Price to Earnings ratio. Outlook on BSE Smallcap Index. IGL Long term pick. What S&P Dollex 30 index is suggesting? Path ahead for CRB Index. Outlook on EURUSD. Mutual Fund section. Get your copy and see the long term forecasts and world markets at a glance. For more details Contact US

Indian Equity market at life time highs but valuations are concerning!

Below is the English transcript of article published in “The Economic Times” section of Navbharat Times by Ashish Kyal, CMT

Indian Equity markets are trading at life time highs. In previous week Nifty touched life time highs of 9673 levels and Sensex touched the higher levels of 31,332. Sensex formed an important low at 25753 on 26thDecember 2016. Since then we have seen a rise of nearly 21% in just 5 months of time.   

Sector performance: The major contributor to the rally from the beginning of 2017 has been Banking, Energy and Automobile stocks. One should use any correction in these sectors as excellent buying opportunity from long term perspective. On the other side defensive sector like Pharma has been a major laggard. Stocks within this sector have continued to trade in Bear trend and buying should be done only cautiously unless the overall long term trend reverses on positive side. Midcap and Smallcap indices also rallied sharply during the same period and many of the stocks within this high beta sectors have entered into bubble territory. It is therefore important to have a cautious approach while investing in Midcap and Smallcap stocks. One should follow strict stoploss in case there is sharp reversal as the valuations are very high.

Sensex Valuations: Price to Earnings ratio (P/E) is one of the simplest parameter that helps to understand if the market is fairly valued or not. We can plot the chart of this ratio to see the danger zone in the past and accordingly understand if current valuations are justified. Sensex Price to Earnings ratio (P/E ratio) is currently at 23 levels and Nifty PE ratio is nearing 25 levels. In the past we have seen that important tops are formed whenever markets came near this zone. Major top was formed in 2010 when Nifty PE ratio crossed 25 levels. Also, Midcap and Smallcap PE ratios are extremely high which was never seen before. This indicates that the current market is in the alert zone and stock specific approach should be adopted.

Technical Perspective: Current trend for Sensex is positive but prices are approaching near the resistance levels which is now at 31800. A simple method that an investor can use is to see the 20 period weekly Moving average. In the entire trend of past few months Sensex has managed to stay above this Moving average. Support as per this average is now at 29300 levels. So medium term investors can hold their positions as long as Sensex protects 29300 levels on downside.

Outlook on Currency – USDINR: Indian Rupee appreciated sharply against US Dollar since start of 2017. The currency pair moved from the level of 69 seen in November 2016 to the levels of 64. This will help import related businesses and also ease pressure on import bills of the country. We can expect this currency pair to now move in a range of 63.80 and 65.40 over next few weeks.

Week ahead: Sensex can show some consolidation in this week as prices are near important levels. Investors should buy stocks that are fundamentally strong and avoid Midcap and Smallcap stocks that are overvalued. For Sensex, prices can move within the range of 31500 – 30800 levels in coming week. Fresh investments should be done with strict stoploss levels to avoid being stuck near the top!

Webinar: Nifty's current valuation justified? Technical Analysis perspective

Ashish kyal,CMT talks about Nifty,Bank Nifty,Nifty Midcap Index valuations showing Price to Earning charts of these indices and comparing with the historical Earnings, He strongly suggestiong that the markets are over heated! He has explained a fundamental parameter using Technical tool.A very different perspective of looking at markets.

Plot Your Own Technical and Fundamental Charts

To help our readers with the tools that we use have integrated Charting functionalities on our website - wavesstrategy.com. This module also makes it easy for someone to mark Elliott wave counts with tools available on the left side. Trader's Forum will provide opportunity to share across your findings and markings directly with other users on the website. So keep exploring here- http://www.wavesstrategy.com/charts/

Nifty Elliott wave and power of channels!

Bottom Line: Nifty continued to find to cling to the upper trendline of channel. Let us see if momentum can build up from here or fizzles out!

Nifty daily chart:

Nifty 60 mins chart:

Wave analysis:

In previous update we mentioned that “Nifty has continued to trade near the important channel resistance and stay alert. Close above 9650 is must to continue the rally whereas move below 9580 followed by 9545 will indicate that wave b has started on downside.”

Nifty continued to move in a range as expected and is simply clinging onto the upper trendline of the channel. The resistance as per this line is shifting higher since it is upward sloping and now it is at the zone of 9660 on upside.

A very important observation is that the premium on Futures has reduced drastically which is demanding mere 5 points premium against the underlying spot. During strong trends we have observed futures premium to be in the zone 30 to 50 points when expiry is that far away. It is important to keep a tab on this indicator over next few days.

As shown on hourly chart, prices continue to cling to the trendline. RSI is exhibiting minor negative divergence but there is no price confirmation. Break below 9545 will indicate that wave a is over and wave b is starting on downside.

From trading perspective the most important aspect is to identify the pattern under formation. After completing second wave x near 9342 on 21^st May prices are now in third standard pattern. There is high probability that this pattern will develop as a Triangle since complex correction normally ends with a triangle or a wedge pattern but it is only an assumption. Next few days of price action is going to be important which will provide clarity on the ongoing structure.

Nifty can continue to consolidate as long as 9660 and 9545 levels are protected. So Buying near supports and selling near resistances can be a good strategy to capture small moves during the day.  Selective stock movement has continued where only a few stocks are helping index to stay at elevated levels. Nevertheless, there is no negative price confirmation as of now.

In short, break below 9545 will indicate that wave b has started. Price and time taken by this wave b will confirm the entire pattern. If wave b consumes lesser time than wave a and retraces less than 50% of wave a then chances of Diametric pattern is high whereas more than 50% retracement of wave a will increase the probability of Triangle formation.

The volatility is going to increase in next few days and in this volatility one should not get carried away and following the important reversal area along with pattern is vital. Subscribe to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.