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.

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