Moving averages: How can it be used to form trend following system?

Moving averages are basic yet powerful tool to stay in the trend. In this webinar see how one can use multiple averages to stay in the trend. Visit https://www.wavesstrategy.com

Tata Motors – How far will it fall? Is it a value buy?

Tata Motors had been a major underperformer within the auto space. With each swing of fall investors have been thinking this is it but only to see it fall further! So, even if you think it is a value buy at every fall you are only losing your capital.

It is therefore best to await and get positive price confirmation before committing your hard earned capital to a stock like this. A similar story was witnessed even in pharma stocks when at each fall everyone simply kept on losing money. However, we published our bullish outlook on Pharma only recently after seeing faster retracement above the last falling segment and when the important resistance levels were taken out. This makes a lot of sense as you are getting a value stock but with a strong technical confirmation.

Similar strategy should be adopted even for Tata Motors, Now look at the below chart which is published in our daily equity research report – The Financial waves short term update

Tata Motors Daily chart:

Tata Motors Hourly chart:

Wave analysis:

Tata Motors a leading global automobile manufacturing company has shown a massive downfall by 33% since the start of the year 2018. From the high made near 450 levels the stock has failed to show any signs of positive retracement and currently the stock is trading near its 52 week low.

As shown on daily chart, prices are moving in downward sloping channel. Prices are moving in the form of Complex correction pattern and the last set of correction in the form of wave z is ongoing. If carefully look at the RSI indicator we can see that it is moving in a range also the overbought zone for RSI has now changed to 60 from where prices recently witnessed a down move.

A shown on hourly chart, prices are forming Bow- Tie Diametric pattern in which contraction is seen in initial legs and currently expansion is ongoing.  As per wave prospective, wave ……….. is completed on upside near …… levels and currently wave ………. is ongoing on downside.

In short, trend for Tata Motor remains negative. Break below …….. levels can take the prices southward towards …….. levels or lower levels. Avoid creating any long positions unless we see close above ………. where wave ……… completed. This stock has drastically failed to live up to investor’s expectations and it is best to avoid catching a low here.

The above clearly shows the strategy you can follow to invest in so called value buying. It is best to let stocks run its course and when it is done we will know by seeing a faster retracement above the last falling segment.

So what are the key levels on stocks like Tata Motors for value buying?

Charting tool: Plot your chart on Tata Motors

Get access to “The Financial Waves short term update” and “Multibagger research report” to have a complete list of stocks that looks good right from short term trading to long term investments. Know more here

Bank Nifty: How precisely RSI and Elliott wave can be combined?

Nifty and Sensex continue to trade in new uncharted territory and Bank Nifty also showed a strong rise after making a low near 27800 levels.

There are simple indicators that can help in capturing the short term reversal and if you combine it with Elliott wave short term pattern it can provide a great insight and trade setup.

Look at the below chart of Bank Nifty which was published in daily equity report “The Financial waves short term update” on 27th August 2018 morning:

Bank Nifty 60 mins chart: Anticipated on 27th August before equity markets opened

Happened:

Elliott Wave analysis: Following was published on 27th August 2018 morning before markets opened

On hourly chart, the previous down move in the index led the prices to break the upward sloping channel which was working pretty well previously.  Currently we are seeing wave b ongoing which looks to be matured. Also, the RSI is quoting at 30 levels exactly the level from where we have seen bounce in the prices in the previous instances. But one needs to stay cautious and wait for price confirmation for taking long positions.

In short, Bank Nifty is at crucial juncture and a break above 28000 is expected to take the prices towards 28200 – 28300 levels whereas a move below 27765 …………

Happened: Bank Nifty reversed back on upside even though it broke below the channel support. This clearly shows that how one can use RSI and Elliott wave combine together to form trading strategy.

Get access to “The Financial Waves short term update” and see yourself why it is important to use trend following method in the ongoing euphoria and avoid shorting unless the support levels are taken out. There have been slow down in momentum but there had been no price confirmation yet for reversal. So what is next? See yourself here

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Reliance Multibagger stock with 77% returns in just over a year!

Reliance Industries has been outperforming since Nifty started its journey on the upside and also is amongst the top stocks which has helped Nifty to hold the apex.

We published about Reliance Industries on April 2017 and predicted a possibility of Multibagger returns. The stock gave almost 77% from the levels given in just over a year. So, irrespective it is a largecap we were able to capture a strong up move.

We were able to predict its move with the help of Time Cycle and Elliott wave techniques.  Prices post forming a triangle pattern gave a break on the upside in the form of primary degree wave 5. 

See yourself the chart of Reliance Industrieswhich rose from the level of 700 to 1236

Reliance Industries Weekly chart: adjusted for split (anticipated in April, 2017)

Reliance Industries Weekly chart: Happened

The above research about Reliance Industries was published on 04th April 2017

(Here is a part of research taken from research report.)

Reliance Industries the third most profitable company and is one of the highest volume traded stocks on NSE. This stock carries weightage of 6.78% which is the second highest market capitalization after TCS. 

On the above weekly chart, currently primary wave III is completing its course and further subdividing in 5 legs. Wave 3 of the same completed at the life time highs of 1500 (before split) levels in 2007 after that wave 4 completed its course within the contracting structure near the channel support at 1012 (before split) levels. Now wave 5 has started its course on upside which should be impulsive in nature, so this is the correct time to enter this stock in staggered fashion from medium to long term perspective to experience an impulsive segment.

??? weeks bottoming cycleis suiting brilliantly to the above chart and all the major lows are made near the same in the past. As per this cycle bottom was made in the mid 2015 and the next is due in ……. so the outlook as per this technique would be positive.

In a nutshell, cluster of evidences like channelized technique, Elliott wave counts, time cycles, moving average line indicate that the next Bull Run has begun in this stock from medium to long term perspective. Important support is placed at …. levels near the channel support, on upside we should continue to see a multiyear’s bull trend towards …… levels where intermediate wave 5=wave 1.

Happened: Reliance moved precisely as expected and gave a return of more than 77% that too in just over a year. Also the risk associated with this largecap was minimal at the time we published it.

So, which are the next Multibagger stocks that will increase your portfolio value over the years to come by strongly outperforming the broader markets?

A Multibagger is not necessarily only from Midcap or Smallcap space but if you are able to identify the stock from largecap that is on the verge of giving a breakout from multiyear consolidation it can also provide tremendous returns. The above is a classic example and no one dared to forecast Reliance thinking where will Nifty head if Reliance increased multi-fold. You have the proof now!!

Get access to “The Multibagger research report” and create your own portfolio of stocks that have potential to give multifold returns. It is a systematic and probabilistic scenario using Elliott wave, Time cycles and fundamental parameters like PE ratio.

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Nifty at Inflexion point, You cannot miss this next big move!

Nifty, Bank Nifty are at very important juncture. What is the technical analysis suggesting? Visit https://www.wavesstrategy.com for detailed analysis using Elliott wave, Neo wave

Bank Nifty: How to use Parabolic SAR for identifying key support?

Nifty and Bank Nifty both continue to trade near lifetime high levels. During such moves the best method to follow is to use trailing stop method from positional trading perspective.

Below you can see the chart of Bank Nifty along with Elliott wave pattern and a trend following method using Parabolic SAR.

Bank Nifty daily chart:

Elliott Wave analysis:

The following was published today morning in “The Financial Waves short term update”

In previous trading session Bank Nifty had a minor positive opening near 27920 levels. It has managed to cross 28000 levels making a new high near 28120 levels and closed on a positive note near 28062 levels.

As shown on daily chart of Bank Nifty, we are showing parabolic stop and reversal indicator which determines the price direction and the reversal point. As of now, SAR is providing stop near 27524 levels, so from short term basis this level can be used as an important support level.

As shown on the hourly chart, (showed in morning research report)

In short, …….. Existing long positions can trail stop towards 27750 but fresh longs should be initiated with caution.

We keep juggling around different methods and indicators depending on the market trend. This is the time when one needs to keep riding the long positions with trailing stop method. Get access to “The Financial Waves short term update” and see yourself the key levels on Nifty, Bank Nifty, stocks. Also subscribe for a year and get monthly update free along with it. Subscribe NOW

Nifty: Gann projection level and PE ratio alert!

Nifty has touched the unprecedented levels and the valuations have reached sky rocket. The PE ratio of index has crossed back above 28 levels!

For us charts convey lot of information. In the past we have seen how markets behave when PE ratio crossed above 28 mark. It was in the year 2000 and later 2008. The euphoria has been on a rise but deliverable volumes are low. Many are still stuck in Midcap and Smallcap stocks and are waiting for them to recover.

We use advanced technical tools like Elliott wave, Neo wave, Time cycles and much more. Look at the below chart published in the latest monthly research report – The Financial Waves monthly update

Nifty Gann projection levels:

Nifty Gann projection

Nifty PE ratio:

Nifty PE ratio

Below is the part of research picked up from “The Financial waves monthly update”

Euphoria – Mania returns to equity markets –

Nifty had a strong rise in the month of July and prices moved from the lows of 10604 to 11366 thereby making new life time highs. During this period we can also see Sensex and Bank Nifty also touching new highs. The reason why we are addressing this move as euphoria or a mania is by looking at the trailing 12 months Price to Earnings ratio.

Price to Earnings ratio at historic levels – If you look at Figure 5 we are showing over past two decades the levels of PE which result into catastrophic reversals. The correction which ensued when PE ratio was so much stretched was a rush to catch back again with the mean value. To maintain the mean value we need to see deviation in the opposite direction. So everytime prices crossed above 2 standard deviation of mean PE value we can see it going towards negative 2 standard deviation over subsequent months or years. This way the average PE had been maintained around the zone of 18 – 19.

Also, everytime such historic valuations are reached there will be enough logical reasoning to explain why it is justified. Even during IT boom of 2000 there was justification that the economy is now going through a historic change which was never before witnessed and so re-rating of PE is inevitable. But what was inevitable was the sharp reversal and deep correction post that. This time as well majority of the fundamentalist who are already invested in the markets are now justifying why the current levels of PE value is fair. Trust me this has been ongoing for centuries and is no different. If you can simply open the charts of global markets with long enough history and search the news when the valuations were highly expensive you will find similar reasoning because there is no other way to explain the mania.

If you have been following the monthly research over past months we have identified such mania in Bitcoin and everyone saw how quickly the entire optimism turned into catastrophe. We are not trying to catch a top here but the risk which is now increasing with each passing day is simply not worth the fresh investments and we have history of data available to back this up.

Gann projection level:As shown in figure 4 Nifty has now broken above the level of ……. which was acting as stiff resistance earlier. This level will now act as a very important support on downside. The next projection level as per Gann is at 11503. So for any reversal confirmation we need to see decisive break below …….. levels and unless that happen it is best to avoid catching a top in this euphoria.

Neo wave plausible scenarios: (refer the monthly research report)

 The above shows the important levels that one has keep a watch and why the valuations are at extreme levels. These tools are not for short term timing but it is important to pay heed when they reach the extreme zone!

So, what is next for Nifty, sectors that will outperform, commodity index and much more?

Get access to “The Financial Waves monthly update” and see yourself all the major indices at a glance with most objective reasoning in this euphoric scenario. Also for limited time you can now subscribe to “The Financial Waves short term update” and get monthly update along with it. Subscribe NOW here

Dabur: Multibagger giving 29% returns in just over 3 months!

Dabur has been another major outperformer from our Multibagger research and it has given nearly 29% returns in just over 3 months. The study used to identify such stock is Time cycles combined with Elliott wave analysis.

Identifying the stock that has capability to give promising returns that too when Midcap index is way below their life time high levels is not an easy task. We use various methods to stay objective and identify such jewels that has huge potential not based on fundamentals but a strong technical structure. Dabur was one such stock which we published on 18th April in our “Multibagger research report”. The stock was trading near the zone of 345 – 350.

See yourself below chart of Dabur which helped us to be bullish at 345 – 350 levels and the stock touched intraday high of nearly 444.85 in today’s session. That is a whopping 28% – 29% return in just over 3 months.

Dabur weekly chart: (Anticipated on 18th April 2018)

Dabur weekly chart: Happened

The above research about Dabur was published on 18th April 2018 in our “The Financial Waves Multibagger update”.

(Here is a part of research taken from the Multibagger research report.)

Multibagger stock recommendation: Dabur

Buy Price – 340 – 350

Time Horizon – 1 – 2 years

Investment – 5% of capital

Target price – ………. levels

Stoploss – 250

Elliott Wave analysis: (Anticipated on 18th April 2018)

Dabur India Ltd is into FMCG sector with Market Capitalization of over Rs 61,900 Crore. The major reason to pick up this stock is that it has been into a long bull trend since 2003. The overall structure of this stock is explained below.

Elliott wave perspective: As shown in weekly chart of Dabur, from 2012 to mid-2016 prices moved higher from the levels of 92 to 316 levels in the form of primary wave …… which is more than 240% increase? After the strong Bull Run this stock was contained within a consolidation and prices drifted lower from the high of 316 levels to 265 levels in the form of wave ……..

108 weeks cycle, channeling technique: and much detailed explanation given in the Multibagger research report.

In a nutshell, various indicators like Time cycle, Exponential Moving Average, Elliott wave counts and channel technique suggests that we can expect this stock to rally towards ….. levels over next 1 to 2 years with 250 as very important support.

Happened: As mentioned prices exhibited a sharp move on upside and has performed amazingly well touching intraday high of 444.85 providing nearly 29% return in short span of time. This clearly shows even in this market when only a few midcap stocks are participating we have been able to identify a stock having potential to give amazing returns.

Create your portfolio of stocks that have potential to give 80% to 100% returns over 1 to 2 years. However, one has to take a systematic and disciplined approach and book partial profit for capital protection. Subscribe now to “Multibagger research report “ here

Nifty: Trade setup for coming week!

Nifty has been gyrating sharply but within a range. I am sure if you are tracking one key fundamental parameter – Price to Earnings ratio (PE) you are aware we are now above 28 levels! Yes, this level was last seen only in 2000 and 2008 and everyone knows how prices reacted post that.

So, what to expect next and what are the cycles suggesting? See this in the latest webinar here:

Bank Nifty: Is it completing its final up leg?

BANK Nifty has shown strong rise from the lows of 24000 till 27900 levels. With RBI rate hike we are witnessing a pause in its ongoing rally. Or is it just a coincidence? Now everyone will talk about market corrects post RBI policy but the overall pattern was nearing completion anyways.

Below is the chart which shows how we were able to capture the entire move from 24000 using techniques like Elliot wave, Moving averages.  This was published in Monthly research report.

Bank Nifty daily chart – Anticipated on 7th April 2018

Bank Nifty daily chart – Happened so far

Below is the extract taken from The Financial Waves Monthly Update published on 7th April 2018

Anticipated – We continue to look at the entire move as a Diametric pattern and wave f might be completed at the lows. We can start seeing wave g on upside that can take prices towards 26000 levels or higher. PSU Banking stocks like Bank of Baroda, SBI, Canara Bank that were leading the down move have started showing some bottoming formation and managed to form higher highs and higher lows on daily scale. For Bank Nifty, on downside 24100 is an important support which is also the Gap area created on 5th April. So as long as this Gap remains protected we will stay with the current outlook that wave f is over and wave g has started on upside.

Happened: Bank Nifty moved higher from the lows of 24000 and crossed above 27500 in the form of wave g. This has helped in capturing a move of more than 3500 points on this index. We are again at the juncture where there is possibility of a big trending move but in opposite direction. So what is next?

Based on above research our clients were able to capture the ride on early stages. Subscribe to “The Financial Waves monthly update” and “The Financial Waves Short term update” to see why we have arrived at crucial juncture and the pattern looks near completion. It is time to pull the trigger as soon as support levels break. You cannot afford to miss the next big trend. Get access here