Thursday, September 27, 2018

Tata Motors: Amazing Diametric Neo pattern in work!

Many analysts tried to catch a low of this stock but we have been bearish from many months. This stock has failed to show any contribution during the rally of Nifty 50 index. It has been moving in lacklustre manner since 2017.

Using techniques like Elliott waves, Neo wave, Moving averages, Bar techniques, we have been able to capture the move from 250 levels. From past 7 consecutive trading sessions stock has failed to close in green.

Tata Motors Hourly chart: Anticipated as on 19th September 2018

Tata Motors Hourly chart: Happened as on 27th September 2018

(Below is the research taken form daily equity report published on 19th of September, 2018)

Wave analysis:

In the previous session Tata Motors had a minor gap down opening post which it continued to trade lower making a low near 250 levels. The stock slipped by nearly 3.50% and was among the top losers in the Index. While there has been speculation that the move came out after Tata Motors owned JLR confirmed a cut in its production while if we look at the other side the stock had been in a downtrend for many months now and it is no surprise for us.
A shown on hourly chart, prices are showing an overlapping move and are forming a Diametric pattern; post completing wave f near 280 levels currently we are seeing the last leg i.e. wave g ongoing which is expected to take the prices further down. At this juncture any pullback can be used as a shorting opportunity…….

In short, trend for Tata Motor looks negative. It is wise to use any pullback towards 255 as a shorting opportunity for capturing a move towards 240 or lower levels…

Happened: Prices of Tata Motors have moved precisely as expected, making a low 226.55 levels. This stock has failed to show any sign of positive reversal. It is better to use shorting strategy using proper resistance levels to avoid the noise of volatile move.

To know about the crucial levels of various stocks and how far the Tata Motor will move subscribe to our daily equity report published under the name of “The Financial Waves Short Term Update”. Get access to the research report here

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Tuesday, September 25, 2018

India Bulls Housing Finance: Power of wave iii Impulsive pattern!

With the ongoing crises housing finance companies are under selling pressure. Stocks like India Bulls Housing Finance has been witnessing a steep fall from past 5 consecutive trading sessions and even in today’s session it has cracked by 9% with no sign of positive attempt.

Was it possible to predict this fall? Below is the chart published in our daily report the “The Financial Waves short term update” on 11th September 2018 where we were able to capture the move on downside.

India Bulls Housing Finance 60 mins chart: Anticipated as on 11th September, 2018


Wave analysis:

Anticipated: India Bulls Housing Finance has failed to close above previous weekly bar’s high from past 4 weeks. This shows that the stock is under major distribution so it is best to adopt proper risk management strategy. 

As shown on daily chart, India Bulls Housing Finance has been going through Complex Correction pattern from start of 2018. Currently wave (x) has completed on upside indicating that a set of correction is still pending on downside….

As shown on hourly chart, prices have reversed from its resistance trendline. Wave b has completed on upside and currently wave c is ongoing which is impulsive in nature. Also its 30-peridos EMA is acting as resistance which keeps the tone bearish. In short, trend for India Bulls housing remains negative.

Happened: This stock has moved as expected, it broke the lower trendline of the channel as well and simply collapsed. Our downside target was near the channel but anyways the direction we have been betting on was perfectly in sync. We have been bearish on this stock for quite sometime from near 1300 levels. This shows how precisely the Elliott wave technique works.

To know the detail research get access to “The Financial Waves short term update” also know how further the down move will continue on Nifty 50 index along with stocks where you can create long or short positions. Get access here

Monday, September 24, 2018

LIC Housing Finance: Amazing down move captured using Channel, Wave, Moving average

LIC Housing Finance showed sharp selloff in lines with other Housing Finance companies. But the trend had been negative for many months and we were expecting prices to move lower weeks earlier. See below detailed research given on 11th September 2018 well before the crash across the space.

The down move on Friday was contributed to the default by IL&FS which in turn resulted in DSP Mutual Fund selling their holdings in DHFL bonds at steep discount. This created panic among the market participants who perceived the entire Housing Finance space is in big trouble. The entire Housing Finance Sector has been under pressure due to this event. We successfully anticipated  fall in LIC Housing Finance and the stock cracked. One should avoid catching low in such weak stocks unless we see a break of important resistance levels on the upside.

Below is the chart published in our daily report theThe Financial Waves STU” on 11th September 2018 where we able to capture the move from 490 levels

LIC Housing Finance 60 mins chart: Anticipated on 11th September 2018


Wave analysis: Following was published on 11th September 2018

LIC Housing Finance post forming a top in June Month has shown a weak movement since then with no attempt of positive reversal. In the previous session the stock closed nearly 3.50% negative and formed a low of 482 levels in the final hour of the session.

We have shown ADX indicator on daily chart that displays strength of the trend and also confirms the direction with the help of +DI (Directional Indicator) and -DI. If +DI crosses above the –DI it indicates that the direction of the trend is positive. The +DMI (green) is moving below –DMI (red) suggesting negative move. If we observe well whenever the distance among these two lines increases we see continuous downwards movement and when they are nearing convergence we see range bound movement. Here we are witnessing the former scenario, hence further downmove is expected.

As shown in the hourly chart, prices are currently moving in wave iii of (c). Also, the EMA and channel are working very well and one can make use of the channel support and resistance for taking short-term positions. Any pullback can be used as a shorting opportunity…

Further in today’s morning research report we again covered this stock mentioning the following: As shown on hourly chart, prices completed wave iii near 396 levels and currently wave iv is ongoing on upside. We have not seen any signs of positive retracement since the top made near 585 levels on 24 August indicating signs of concern. Any pull back near 460 levels can be used as shorting opportunity for a move towards 420 or lower levels.
Happened: Irrespective of the event we have been bearish on the stock and even today it moved as expected. The pullback on upside was temporary and prices breached below 420 levels as well. This shows the power of Elliott Wave.

Get access to “The Financial Waves short term update” to know where the Index is headed ahead along with stocks where you can create long or short positions. Get access here

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Friday, September 21, 2018

Wednesday, September 19, 2018

Nifty down 400 points in just 7 trading days! See amazing application of indicators....!!

While many traders were expecting Nifty to move towards 12000-12500 levels we have been expecting a reversal on the downside as majority of the indicators were pointing towards it.

This is exactly what we expected and we talked about the same in our Monthly report published in the 7th September 2018. We were able to anticipate the coming trend just with the help of Indicators & basic techniques like Moving averages.

Below is the chart we published in our monthly report, “The Financial Waves Monthly Update”

Nifty Daily chart with Moving averages and indicators : Anticipated as on 07 September 2018

 Nifty Breadth chart

Nifty Daily chart: Happened as on 19 September 2018
(Below is the extract of research published in the Monthly report)

Nifty moved in unchartered territory in the month of August and touched life time high levels of 11760. The movement on the upside has been without the support of much needed breadth and broader participation. It is only lately we have started seeing some participation from Midcap and Smallcap indices. These high beta indices still are far away from their life time high levels. The overall Advance decline line which measures the number of stocks advancing to that of the declining has continued to stay near the lower levels. Infact this line is near the lows when Nifty was sub 11000 mark. This is very similar to the rise seen during early 2015 post which we saw a correction for almost a year until 2016. This is the reason why not all stocks in your portfolio might be moving higher despite Nifty touched life time high levels in August 2018.

There are three different Moving averages shown on the chart.

20 days and 5 days Moving average –These are short term averages and quite useful for swing traders. The common tendency is that the 5 days average moves away from the 20 days and then again it mean revert to the 20 days average. This tendency can be easily seen using the Moving average difference indicator shown below the chart in Figure 5. When this indicator falls below the 0 line we know that there is Price and / or Time correction which has started. Post the lows formed near 10558 we have not seen negative crossover. The selling seen over past few days this average is now coming closer to a negative crossover. This will further confirm that atleast a short term top is placed on upside.

At the same time the indicator also helps to understand the overbought zone and the extreme levels. We can see that the MA difference is reversed exactly from upper end of 200. This level was taken out only once but that too temporarily. During the entire up move since the low formed in December 2016 near 7900 levels the difference between 5 days MA and 20 days MA never exceeded 200 points. This is very vital information and so any further deviation of more than this might hint towards unsustainable mania as the undertone.

Case in point –The overall tone of the markets looks reversing on the downside. We have entered into very important phase. As we have not yet seen reversal in the trend following system but at the same time the indicators have reached the extreme reading and so one has to stay cautious. For investors this is not the ideal level to enter and it is best to wait for mean reversion back towards the long term average for fresh long term investments.

Directional Movement ADX–Directional movement index (ADX) is used to determine the maturity of the trend. This indicator is now at the previous peak levels. After this trending move there is tendency to see non trending behavior. A turn on downside in this indicator will suggest that the distribution has started. For now it is suggesting markets are reaching the extreme levels.

In a nutshell, the overall trend looks matured and we have started seeing the volatility. The indicators have entered into extreme levels but it has been more than 22 weeks since we saw lower high and lower low on weekly charts. This week we closed below 11595 which is negative close below prior week in nearly 22 weeks.

This is another way of following the trend. To avoid the confusion and put it simply the trend looks matured and next few days are crucial for confirmation. Fresh longs should be created with caution. …… The ongoing mania is going to culminate equally fast and one should be quick to change the stand as and when it happens.

Happened: Nifty has reversed back sharply from the highs of 11600 and touched intraday low of 11210 in today’s session. This clearly shows how basic indicators can also be highly effective and it clearly reflects how one can combine these various methods together.

The above shows power of basic technical even without Elliott wave. When we combine these advanced concepts with basic methods the accuracy takes a huge jump. So for how long this downtrend will continue?

To know what we are expecting from Nifty and how other stocks are expected to move on short-term basis subscribe to our report under the name of “The Financial Waves STU” Get access here

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