CEAT Tyre: Is a major low in near vicinity? Fibonacci application

Fibonacci series are used to predict the potential areas of resistance and support. It helps the investors to determine multiple price targets. It needs to be combined with other technical analysis to improve its accuracy and it goes well when applied with Elliot Wave theory.

Ceat tyre has been moving towards lower levels making 52 weeks low near 998 levels with no attempt of positive reversal. We have been bearish on this stock when it lost its substantial value after quoting it’s all time high and started making lower high lower low pattern.

Below is the daily chart of CEAT Tyre showing detail analysis using Neo Wave, Moving Averages and Fibonacci technique taken from our daily equity research report published under the name of “ The Financial Waves Short Term Update.”

CEAT daily chart:( Anticipated as on 28^th September, 2018) 

CEAT daily chart:( Happened as on 24^th October, 2018)

 

(Below is the gist taken from equity report published on 28^th of September, 2018)

Anticipated:

Tyre companies like MRF Ltd, Apollo tyre, Ceat ltd; have been under pressure from past few trading sessions. Even in last trading session Ceat stock prices cracked by 5%, making 52 weeks low near 1168 levels.

Fibonacci series: This is a common method in technical analysis which is use to drive support and resistance areas. On daily chart of Ceat, prices are forming Diametric pattern and are currently in last leg in form of wave g. As per the guideline, wave g of Diametric pattern tends towards 61.8% followed by equality with wave a. Considering this we can expect prices to move towards 1120. Break below 1120 levels can further infuse selling pressure taking the prices southward towards ……...

As shown on hourly chart, wave g is forming Complex Correction pattern. Currently wave c is ongoing on downside. On upside an important resistance is placed near 1250 levels as long as this is intact on upside move towards …………. can be expected.

In short, Ceat trend remains negative. Move towards ………can be expected. This will be the preferred scenario as long as 50-periods EMA is intact on upside.

Happened:  Bears have completely gripped their position on Ceat.  Prices have moved as expected falling more than 76.4% of wave a move and made 52 weeks low near 998.50 levels.

The stock has achieved our targets and is now nearing a major reversal zone as per Fibonacci projection, Elliott wave pattern and indicators. Is it time to start looking for bottom fishing? Are stocks going to hit a major low and reverse back sharply?

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