Nifty: Are we heading for a collapse? Technical indicators getting aligned together!

Nifty and Bank Nifty has shown Gap down opening despite all the euphoria and prevailing optimism across the board. But is it just the start of bigger trend on downside?

Below are a few technical studies that are not sending across very promising sign.  These advanced methods like Elliott wave, Neo wave, Time cycles are all pointing towards one direction which is down and now close below important support levels will provide the much needed price confirmation as well.

We have been constantly mentioning to our clients not to buy the euphoria as the probability of going higher looked bleak. Today’s movement simply reflects power of technical studies. But it is just few hours of move and expiry closing is very crucial. We will come out strong and bold probably against the majority as soon as prices break below important support levels from medium term perspective. Keep tracking “The Financial Waves short term update” for key indicators and levels.

Nifty daily chart: (shown in today’s morning report)

(a portion of the chart is purposely omitted as complete chart is shown in morning report for clients)

Nifty had a positive opening but prices after moving in a narrow range finally gave away and closed near day’s low. Stocks like SBI, LT, ICICI Bank looks like forming a classical distribution pattern and break below support levels can result into sharp decline. It is important to see the closing today on expiry but chances of upward movement is getting bleak as cycles are in sell mode.

As shown on daily chart, we continue to look at ….. days cycle in the topping formation. During the previous wave d fall the cycle started putting pressure during the last few days and it seems the similar action is going to be seen this time as well. We have now completed 41 days and prices are simply failing to move higher despite of all the euphoria which is a sign of caution. Many analyst and traders are super bullish even now and if there is sharp reversal on downside majority will be again caught in surprise. Also this time there will not be deeper upside pullback as the positions will be stuck at higher levels.

It is time to look at the internals very closely. As shown on hourly chart (shown in morning research report), prices are moving exactly as we have been expecting. It is simply consuming time in wave (….) of e which can be complete anytime now. Break below lower Bollinger bands followed by break of …… will be first sign of weakness. This followed by move below ……. will provide two stage negative confirmation. We will revisit this once the first set of supports is broken. 

In short, …………..

The above analysis shows various advanced methods that we use in order to forecast the turning areas despite of all the news or ongoing euphoria. It takes strong belief in the studies that has stood test of time be against the crowd… We have been able to capture major tops earlier as well. Let us see if this time as well the probability favours us else it will only be delayed by few more days!

Get access to “The Financial Waves short term update” our flagship research report that covers detailed analysis on Nifty, Bank Nifty, stocks using Time cycles, Elliott – Neo wave and other important indicators like RSI, Moving averages. We might just get an excellent trading opportunity once important support levels are broken on closing basis. It is not very often to see such alignment of indicators. You cannot miss this opportunity, See it yourself – Subscribe NOW!

How to trade Nifty using Neo wave and Time cycles? Path ahead!

Neo wave is advanced concept of Elliott wave and by combining with Time cycles we can develop a very strong forecasting technique. at https://www.wavesstrategy.com you can get access to latest research and analysis on Stocks, Commodity, Currency markets. For any queries write to us at helpdesk@wavesstrategy.com or call us on +91 9920422202

Will Nifty 55 days’ Time cycle work again? A trending move should emerge soon!

Nifty has failed to show any positive momentum in this week even after Moody’s upgrade and prices have continued to move in a range. This is in lines with our expectations and the euphoria has simply failed to sustain so far.

We have been using Time cycles to understand important lows and on occasions to see if there is a possibility of top as well.

Look at the below chart of Nifty shown in today’s morning research report – “The Financial Waves short term update”

Nifty daily chart:

Understanding 55 days’ Time cycle: A cycle is an event, such as a price high or low, which repeats itself on a regular basis. Economic movement is highly cyclical and so is stock market movement. Lows are normally used to define cycle length and then project future cycle lows. Cycles follow certain rules which are explained below:

Understanding Harmonicity: Cycles are harmonious in nature and are normally governed by the factor of 2 or at times by factor of 3. This means that as 54 months cycle exists there is 54/3 = 18 months cycle, 18/2 = 9 months cycle. So 54,18 and 9 months become important set of predefined cycles. Similarly there are smaller cycles like 56 days, 28 days, 14 days.

Understanding Synchornicity: This concept of cycle science indicates that cycle lows are synchronous in nature. It means that if the larger cycle is forming a low then the smaller cycle by default forms a low at that point. So a 54 months cycle low will result into lows of 18 months, 9 months and so on.

We have identified 55 days’ Time cycle that has worked well on most of the occasions for catching important lows on Nifty. This cycle if considered from the lows of Demonetization which is 9th November 2016 has helped to capture short term reversal areas. This can be seen on the chart above.

Topping process or distribution is usually seen during second half of cycle. Let us see if this cycle can put pressure after next few days or not.

If you combine Time cycle with Price pattern the accuracy can be increased drastically. Simply imagine the power of forecasting when you see these advanced concepts combined together.

Subscribe NOW “The Financial Waves short term update” to see if we are on verge of starting the next strong trending move very soon. Do not miss out the next big opportunity. Visit Pricing Page for subscription options!

Equity markets closed higher after Moody’s rating upgrade but this week movement is crucial!

Following is the English transcript of the article published in Economic Times section of Navbharat Times by Ashish Kyal, CMT published today morning before markets opened.

Moody’s upgraded India credit rating after more than a decade. This is a positive sign both for Indian economy and equity markets from long term perspective. However, valuation concerns remain over short term.

Previously, India rating upgrade by Moody’s happened in 2004 but market showed an up move only for temporary period thereby forming a medium term top which was intact over next few months. So, the extreme bullish optimism that is now prevailing should be seen with caution as valuations continue to be expensive. It is better to invest in stocks that have strong earnings potential and lower debt burden.

Bank Recapitalization doze – After the Bank recapitalization announcement by Finance minister in October of this year we saw sharp rise in stock prices of PSU banking stocks like SBI, PNB, Bank of Baroda, etc. But this only reflects how capital starved banking sector is due to NPA issues. So only recapitalization is not the solution but unless banking sector can reduce their NPA burden and form strong strategy to increase loan off take to quality borrowers the recapitalization can only result into a temporary boost.

Banking performance in coming quarters – It is vital to see if banking stocks over next few quarters can show better results and manages the NPA issue. Lot of money has come into the banking system after Demonetization and Recapitalization but quality loan off take, corporate governance and efficient management is very important.

Banking index: Bank Nifty that tracks the stock price performance of Banking stocks has touched new life time highs and closed at 25728 levels in previous week. PSU and private sector banks both contributed to the rise. One should keep a track on Banking index as this is a leading indicator to see if the ongoing trend is maturing or if there is more steam left in the current rally.

Technical perspective: From technical perspective Sensex had a big Gap up opening on 17th November after Moody’s credit rating upgrade. However, index closed the day at 33342 after touching intraday high of 33520 levels. So some selling was seen at higher levels. For positive trend to continue we should now protect the short term support of 33000 levels.

Week ahead: It is important to see if the Gap of Friday can be protected over next few days else the positive event of ratings upgrade which was awaited for more than a year will only result a spike top. Move above 33520 is required for an up move to resume. In this week we can expect some consolidation between 33520 and 33000 levels before a trending move can be seen!

How to trade Reliance Capital? Stock moved brilliantly as expected!!!

Looking at Reliance Capital stock prices many would be in shock to see a fall of 10% in just a day. But was it predictable? Yes, look at the below research published on 8^th November 2017.

You can read below to understand the significance of an Impulse pattern if identified correctly. On 8^th November 2017 we showed the below chart of Reliance Capital in our daily research report – The Financial Waves short term update and mentioned the following:

Reliance Capital 60 mins chart:

Reliance Capital Happened:

Wave analysis: The following was mentioned on 8th November to our subscribers of short term update

As shown in 60 mins chart, price movement witnessed since September explains the significance of 2-4 trend line concept of wave theory which states that as long as this trendline is protected the ongoing downtrend can continue. This suggests that as long as 590 levels is protected prices will continue to move in downward direction.

We have been bearish on Reliance Capital over past few weeks and has been mentioning the same to our subscribers.

Happened: Reliance Capital move exactly as per the expectations and the stock price witnessed a sharp fall which was well supported by the news on one of its group companies RCOM after defaulting its US dollar based Bonds. The stock has been witnessing lower high lower low formation without any consolidation indicating the strong momentum on downside.

Reliance capital made a low of 400 in today’s session itself falling by more than 10% in single day. It seems the 5th wave is also extending. So what is next??

We cannot be more accurate than this……….

The above charts simply show how one can use impulsive wave from trading perspective.

You can subscribe to this research report “The Financial Waves short term update” and see yourself how to form trading strategy using Elliott wave and technical analysis methods on Nifty, Bank Nifty, Stocks.

You can also subscribe to Intraday / Positional advisory and get access to intraday stock tips on your mobile via SMS, Yahoo messenger or What’s app

Is correlation between Nifty and Crude Oil a MYTH?

Equity markets and Crude oil relationship are often cited together and it is assumed that rise in Crude oil prices will adversely impact stock market and economy. But is it really true?

Look at the below detailed research that shows that there is no specific correlation between Nifty and Crude Oil. Infact there is more of positive correlation rather than negative.

The below research is picked up from our monthly research report “The Financial Waves Monthly update”published on 6th November 2017, that provides detailed outlook on Nifty, Currency, Sector, Stock pick from investment perspective and much more.

Nifty and Crude Oil- Understanding the relation:

Crude is one of the highly traded energy commodities and keeping close watch on the same is very important. On media or business news channels we have seen many times that experts speak about the impact of Crude prices on Indian Equity Markets. You may have heard that rising crude prices are bad for economy and thus it will have negative impact on stock market or falling crude prices are good for economy. These are the two important phrases which we have seen on media many times. However to be objective in the market, it is very important to look at the trend of each of these asset classes and also to understand if stock market is really moving on back of volatility of Crude or not!

We have placed both these asset classes in the same chart to understand the overall correlation. Here we can see that in the year of 2008 it was the Indian Equity Market which formed a top earlier and then after few months Crude followed the trend of Indian Equities and started to move lower. Post the same in the start of 2009 both these assets formed a low more or less in the same month. From the above chart it can be seen that high direct correlation existed from 2008 till 2010 between Nifty and Crude prices.

In the period from last quarter of 2010 to first quarter of 2011 there was an inverse relation during which Nifty showed sharp fall but Crude continued to move higher. 

From 2011 to the mid of 2013 Crude and Nifty both moved in tandem. This was the period where predictability would have become easier depending upon the trend of other asset class. However this relation fade away and then we witnessed inverse relation from mid of 2013 to the mid of 2015. This was the period when people came out with the frame that falling crude prices are good for Indian Equities. However after mid of 2015 Crude and Nifty both started to move lower.

The period from mid of 2015 to start of 2017 was period again with high correlation and it showed direct relation. Interesting thing to observe was that both these asset classes moved higher together. Isn’t it surprising to see this?

Case in point: From the above observation it can be said there are different periods in which Crude and Nifty had direct and inverse relation.  Here we can also see that period of direct relation was longer than that of inverse relation.

The above chart clearly shows that it is “Myth” that rising Crude prices have negative impact on Indian Equity Market. The fact is that both these asset classes have continued to follow their respective trends in which they existed.

Food for thought: ……..

In short, ………..

The above is part of the research published from “The Financial Waves Monthly update”. If you would like to combine it with short term trading strategy and stock recommendations you can get access to “The Financial Waves short term update” our flagship product providing detailed technical analysis on Nifty, Bank Nifty, stocks and much more. Subscribe NOW

What is Nifty trading strategy using Technical analysis?

Are you anxious seeing the volatility in Nifty lately?

I am sure you are watching price movement closely and trying to figure out what is happening.

Whenever markets are changing the direction it results into spike in volatility and if that reversal is after a sustained trend many will start entering at lower levels expecting prices to go up again.

But this time it can be different, it is therefore important to see How to trade Nifty in coming week?

In my latest webinar you can see what is next from here?

In case you have doubts or queries or share across your charts so everyone can learn at Trader’s Forum.

Have a wonderful weekend!

Nifty is showing high volatility over past few days after reversing from channel resistance. At https://www.wavesstrategy.com we use various methods like Elliott wave, Technical analysis, Candlesticks to forecast the trend and form trading strategy on Nifty, Stocks, Equity

Nifty has been moving precisely as per Elliott wave pattern! What is next?

Nifty has given a break below the mark of 10330 in today’s session. So will the downtrend continue?

Nifty selloff seen over past few days might have caught many by surprise but trust me this has been as per the channelling technique and Elliott wave methods I have been talking about over past few days.

We have also published our latest monthly research report “The Financial Waves Monthly update” and mentioned the following:

From trading perspective, it is important to keep a tab on 10500 – 10550 levels where there is confluence of channels which can be seen on the monthly chart in Figure 1. Since this is a big channel the resistance will keep shifting higher with each passing day but the best of the up move might be over and it is time to be alert and not complacent like majority. Keep a tab on ……. levels on downside as move below it will be first sign of weakness… BANG ON!

Look at the trading strategy given over past two days in our “The Financial Waves trading update”

Trading strategy given on 7^th November 2017 - Short positions can be created on move below 10400 with day's high as stop and target of 10370 or lower. BANG ON! Nifty broke below 10400 and selling pressure intensified on 7^th November

Trading Strategy given on 8^th November 2017 - Short positions can be created on move below 10340 with 10390 as stop and target of 10290 or lower. BANG ON! Nifty moved precisely as expected and is moving below 10290 levels.

If you would have subscribed to our Intraday / Positional Stock tips, following are the few calls given in today’s session

REPCOHOME FUT SELL BELOW 585 SL 591.4 TGT1 581.1 TGT2 574.7 – Target 2 achieved

CASH CHAMBALFERT SELL BELOW 141.55 SL 142.95 TGT1 140.75 TGT2 139.25 – Target 2 achieved

MRPL FUT SELL BELOW 129 SL 130 TGT1 128.4 TGT2 127.4 – Target 2 achieved

IBULHSGFIN FUT SELL BELOW 1186.2 SL 1196.2 TGT1 1180.2 TGT2 1170.2 - Failed

Please note the above is only for reference and the accuracy cannot be 100%. There will be a few calls that will not be in favour but if we use systematic method of trading then on net basis there is high probability of closing in positive.

Nifty daily chart: published on 2^nd November 2017

Following is a part of research report published in morning of 2^nd November 2017 - Let us see if this euphoric rise can continue beyond the daily channel resistance which is slowly shifting higher everyday but it is not very far away. On upside 10500 is next hurdle that prices have to cross to continue this momentum ongoing….

The above was published in daily equity research report “The Financial Waves short term update”

Here again is the webinar of last Friday for reference - In my latest webinar published on 3^rd November 2017 I mentioned clearly why it is prudent to not get carried away and stay alert. You can see this yourself: How to trade Nifty from here? Will confluence of channels work again?

The above shows the various Equity research products we offer and how they have worked out during the scenario when majority have been complacent. I am not saying we are going down in vertical way but it looks the distribution has started and it is time to be alert and not get carried away in the euphoria!!!

Subscribe NOW “The Financial Waves short term update” that provide detailed Elliott wave analysis on Nifty, Bank Nifty, stocks with important support and resistance levels. In case you would like to get Intraday / Positional Stock tips register now and get research free along with it.

The Financial Waves Monthly update is now published. See yourself various methods of forecasting across Nifty, Metal Index, Crude, INR and much more in this comprehensive report. Subscribe NOW annually at 30% less price.

Is Nifty uptrend in danger? Time to stay alert!

Nifty came close to 10500 levels but failed to take out the highs. It is very important for you to look at the objective Technical analysis methods like Elliott wave, Channels.

In my latest webinar published on 3^rd November 2017 I mentioned clearly why it is prudent to not get carried away and stay alert. You can see this yourself: How to trade Nifty from here? Will confluence of channels work again?

It seems the confluence of channels that I talked about in the video update worked out very well so far. It is now time to keep a close tab on the important short term support levels to see if the same can be protected or not.

Nifty 60 mins chart:

Over past few days we have been alerting our subscribers of daily equity research reports – The Financial Waves short term update to keep an eye on important levels and not to leverage much.

In 6^th November morning we mentioned that “In short, price movement in this week is important. Let us see if prices can manage to build momentum even above 10500 – 10550 levels where multiple trendlines are intersecting. Failure to do that might result into distribution action. Keep a watch on …….. as short term support in this week.”

We have been using Channelling technique along with indepth analysis using Advanced Elliott wave – Neo wave to understand the maturity of trend. If the support levels are now broken decisively we will get another set of selloff similar to that seen in August and late September.

So, it is now time to be alert and monitor closely if the support levels mentioned in the daily research report is taken out for short term reversal confirmation. The confluence of channel has worked out brilliantly and it has helped us to caution our readers and subscribers when majority of others have been complacent.

Subscribe NOW “The Financial Waves short term update” that provide detailed Elliott wave analysis on Nifty, Bank Nifty, stocks with important support and resistance levels. In case you would like to get Intraday / Positional Stock tips register now and get research free along with it.

How to trade Nifty from here? Will confluence of channels work again?

I am sure being a trader you will look at the charts and use various indicators.

I have been speaking at lot of corporate and was surprised to see majority tend to leave basic techniques like Channels after they move on to the advanced levels.

In this webinar you can see how price targets can be arrived by using the most basic yet fundamental to technical – Power of Channelling technique

I tend to combine this basic building block with advanced concepts of Elliott wave and Neo wave. 

Have a wonderful weekend and do share across your findings using above technique at our Trader’s Forum

You can visit our Charting page here and plot the charts yourself.

Where is LIC Housing Finance headed? Will it reverse on upside?

Where is LIC Housing Finance headed? Will it reverse on upside?

Nifty has continued to hit life time high levels with strong euphoria. However, not all sectors have been contributing in the ongoing up move.

Housing Finance sector which was darling for traders and investors few weeks back is now going through some short term correction.

The below research was published in our daily equity report “The Financial Waves short term update” that showed LIC Housing Finance daily chart as well in addition to below hourly chart.

LIC Housing Finance 60 mins Chart:

Elliott Wave analysis: (picked up from the research published today morning)

Housing Finance sector as a whole has been going through profit booking from last few weeks. In this sector, LIC Housing Finance is one such stock has been going through downward correction since June 2017. In case of any weakness in broader markets, this stock can move lower sharply.

The weekly chart (shown in actual research report) shows that the up move ongoing from the mid of 2013 is corrective in nature and it has been forming Zigzag correction pattern. In the month of March 2016 intermediate wave B completed its course and since then intermediate wave C is running its course. The fall witnessed from 796 to 596 has overlapped with wave i territory which indicates that Ending Diagonal Pattern is under formation. The ongoing fall is in form of minor wave iv which has arrived at the channel support but yet there are no signs of reversal. From last 8 trading session prices have failed to close above prior bars high which suggests ………….

As shown in 60 mins chart, prices have been forming double correction pattern and as of now minute wave c of second correction pattern is ongoing. As per the channeling technique, prices have lot more room to cover on downside and hence any pullback is going to provide shorting opportunity as long as ….. is intact on upside.

In short, LIC Housing Finance trend remains on ………. and prices can move towards …. level where channel support is placed.

Charting Tool: Plot your chart on LIC Hosing Finance

The above chart shows how we can apply Elliott wave along with other technical analysis method. You can get access to “The Financial Waves short term update” our flagship research report on Nifty, Bank Nifty and stocks that give trade setup using Elliott wave and various indicators. Subscribe NOW