Nifty has been moving in volatile
environment but even when Nifty broke below the earlier lows it did not produce
downside momentum. On the contrary many have been extremely bearish by simply
looking at US or global markets.
We can see series of positive divergences
both on daily as well as hourly charts on Nifty and along with that Bank Nifty
has still managed to protect its lows of 8th October 2018 even when
Nifty broke to fresh lows. This is a classical intramarket divergence. See the
series of divergences below:
Nifty
and Bank Nifty hourly chart:
Following was mentioned on 26th
October morning equity research report –
As shown on hourly chart, prices are currently
near the resistance trendline and are hovering around it. After many weeks we
are seeing the fall is getting smaller and smaller and the intensity looks to
be reducing. Now break above the resistance level will suggest sudden reversal
on upside. The chances of Extracting Triangle pattern will be high unless we
see strong momentum building on the downside. As per this pattern post
completion of wave (c) on downside we should see wave (d) which will be bigger
than wave (b) rally. We will focus on wave (d) rally once there is confirmation
by break above …. levels…. I think
we should complete wave (c) on downside very soon but it is better to wait for
resistance break for confirmation of a positive trend when majority will be
caught by surprise.
Happened:
We have been warning our subscribers that the
downside speed is reducing and it is better to stay alert in case of sudden
reversal. On 29th October, Nifty rallied by more than 200 points in
single day. This clearly shows it is so very important to identify the pattern
as per Elliott wave.
Series
of positive divergences - With the rally we got
series of positive divergences on index. You can see from the above chart where
Nifty made fresh lows but RSI on hourly scale made a higher low. Also when
Nifty touched 10004 levels, Bank Nifty managed to protect its earlier lows
thereby giving classical intramarket positive divergence.
With the momentum reducing on downside
despite of weak global markets and extreme pessimism is it time to take a
contrarian stand and bet on upside?
So, which levels to expect on upside and
what should be the stop. Know all this in the daily equity research report – “The Financial short term update”. We
are on cusp of strong reversal provided the resistances are taken out
decisively. But expect a good trade setup as Time cycles are also nearing the
lows!
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