Thursday, December 22, 2022

What is difference between Elliott wave and Neo wave? Application on Nifty charts.

Neo wave is an Advanced Elliott wave method with a greater number of rules and newer patterns to increase the overall objectivity. Whereas Elliott wave which was originally discovered by R. N. Elliott in 1930s. His original work mentioned that stock market does not move randomly but in systematic fashion. This systematic movement in prices are in form of waves. Normally there are 5 steps forward and 3 steps backward resulting into a net progression which is valid for stock market as well.

Any price movement as per basic Elliott wave is classified into Impulsive and Corrective. There are various patterns within these broader heads. Impulsive waves need to follow three basic rules:

1: Wave 2 cannot retrace complete of wave 1

2: Wave 3 cannot be the shortest of the directional waves 1, 3 and 5

3: Wave 4 cannot enter into territory of wave 1

The above 3 basic rules if followed then the price movement under consideration can be classified as a normal Impulse wave. However, when the market structure is complex there is possibility that the movement can be counted in many different ways. This can result into subjectivity and the entire purpose of wave theory can be lost. To overcome this limitation Neo wave was developed that has more than 15 different rules to define a simple impulse pattern. Following are a few of them:

1: Wave 2 cannot retrace more than 61.8% of wave 1

2: Wave 3 cannot be the shortest of the directional waves 1,3 and 5

3: Wave 4 cannot enter into territory of wave 2

4. Wave 2 should take more time than wave 1

5. Wave 4 should take more time than wave 3

6.  2 stage faster confirmation virtually guarantees that trend is over and bigger trend has started in opposite direction

The above shows only a few sets of rules for an impulse pattern as defined by Neo wave. I will be discussing all the rules more in detail in Masters of Waves Online training happening on 7th-8th January 2022.

We take a step ahead and combine this complex study of Neo wave to that of Time cycles. It is not always that both the studies will be in sync but when they are then if we combine it with time then the trade set up is of high accuracy which have the potential to give the best of the returns in shortest amount of time.

Below part of research was shown on 22/12/2022

 Nifty 60 mins chart (anticipated)

Neo wave analysis

Nifty had a gap up opening in the previous session prices could not sustain higher and sharp selling was witnessed. Nifty at the end of the day formed a long bearish candle which suggest weakness in the indices. Shortly, prices are expected to move towards 18050-18100 levels. Whereas on the up side 18480 is nearest hurdle on the upside. Fresh buying can be seen above breach of the same.

On the hourly chart, prices seem to have followed lower high lower low formation. This suggest that short term bias can continue to remain negative as long as we do not see a close above previous candle’s high. On the other hand, prices have moved down by taking resistance of the cloud which suggest that any pullback towards it can be used as a shorting opportunity, valid as long as 18480 holds on the upside.  As per wave perspective, prices have completed wave c on the upside which opens possibility of a C failure flat pattern.

In a nutshell, Nifty had a volatile day and formed a big red candle end of the day. For now, use pullbacks as a shorting opportunity for a move towards 18050-18100. Whereas any break above 18480 is needed for fresh buying to emerge.

Happened as on 22nd December, 2022

HappenedNifty after a pullback made low near 18080 which almost near our second target of 18050.

The above chart clearly shows how understanding Neo wave pattern helped us to catch a total move of more than 400 points which we have been mentioning in our research report since past 2 days.

Subscribe to “The Financial Waves short term update” daily equity research report that covers Nifty, Bank Nifty, stocks providing good trade setups on daily basis. Subscribe here

Master of Waves (MOW) Learn the science of Trading using Elliott wave, Neo wave and Time cycles for short term to long term forecasts in Master of Waves (MOW) – Most advanced Training on Technical analysis that will give the necessary edge to traders both for Intraday to Positional trading on 7th and 8th January 2023. Early Bird Ends on 25th December 2022. Know here 

Friday, December 16, 2022

Nifty - Will it Crash Again or Opportunity to Buy! | Ashish Kyal


Do check out Options Trading course along with Elliott wave, Neo wave and Hurst's Time cycles over here - https://www.wavesstrategy.com/bmw/
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Wednesday, December 14, 2022

Inflation a Lagging Indicator – Useless to See Inflation and Trade the Markets

 Inflation looks to be the logical reason why markets are moving up or down to majority of traders.

However, historical data suggests that inflation is lagging whereas stock market is leading.

Below research is picked up from monthly research report published on 14th November 2022 – The Financial Waves Monthly update

Inflation and Markets - Above chart shows overlap of Sensex chart along with inflation data. We can clearly see from above that Sensex has continued to rise despite of rising inflation which has no strong correlation with prices. The reason being inflation is economic data that is lagging indicator. The data that we see now is for past months or quarter. Whereas, stock market is forward looking and discounting the future. So, Sensex is leading whereas Inflation is lagging.

Above chart highlights this lead lag behavior clearly. We can see that the major bottoms made in Sensex much earlier than the inflation started picking up. Classic example can be the top made in February 2020 when Sensex crashed sharply. Inflation was still running higher near 7% at that point of time which shows sharp decline only later in September 2020. Similarly, Sensex bottomed out in last week of March 2020 but Inflation bottomed out in November 2020 before slowly starting to inch higher. Sensex topping near 61000 in October 2021 is also followed by Inflation topping out in April 2022.

With equity markets again starting to inch higher there is high likelihood that we will start seeing inflation picking up again in lagging fashion. So many, who might be thinking inflation and interest rates have peaked out are here for a surprise and both the inflationary cycle and interest rate cycle is still in upward trajectory. It is only once we see fall in Nifty or Sensex we can have comfort of easing inflation in near future.

In a nutshell, many are tracking inflation to forecast the markets whereas it has to be exactly the opposite way of tracking markets to see if inflation is going to increase or not and in turn the interest rates! Simple way of looking at things that can change the very perspective by plotting out in form of charts.

Subscribe to Monthly research report and see medium to long term forecast on Nifty, Sensex, Bank Nifty, USDINR, DJIA, Gold, Global markets all in one report. Get access here

Learn the science of Trading using Elliott wave, Neo wave and Time cycles for short term to long term forecasts in Master of Waves (MOW) – Most advanced Training on Technical analysis that will give the necessary edge to traders both for Intraday to Positional trading on 7th and 8th January 2023. Know more here

Friday, December 9, 2022

Nifty Trading using Ichimoku Cloud and OI Profile | Ashish Kyal


Ichimoku Cloud helps to understand the overall maturity of trend. This clubbed with Open Interest chart provides vital information for Option Traders. Is it Time to Buy or Sell? Trade setup for coming week by stock market expert Ashish Kyal, CMT, Author

Do check out Options Trading course along with Elliott wave, Neo wave and Hurst's Time cycles over here - https://www.wavesstrategy.com/bmw/
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Disclaimer: All the videos made on this channel are for educational purposes. 

Wednesday, December 7, 2022

Nifty Trading Using Neo wave with Open Interest profile

 Neo wave is advanced Elliott wave method that helps to understand the overall maturity of trend. This along with Open Interest chart provides vital information for Option Traders.

Post RBI policy announcement prices showed decline on downside but is still stuck in a range.

Neo wave plot is different than that of Candlesticks. Over here we can see the internal structure of wave patterns extremely clearly.

Nifty Neo wave plot daily chart

Nifty Neo wave plot 60 minutes chart

 

Nifty Open Interest profile

Nifty daily chart clearly shows the up move to be in form of 7 legged Diametric pattern. Earlier we were expecting it to be a Flat followed by x and then a Diametric but given the latest data this count looks best fit.

Prices post completing wave x, moved up in form of wave a and now wave b is going on. The internal structure of wave a is all corrective and so we might be either in a Triangle or Diametric pattern again. Current ongoing wave if closes below 18570 – 18560 then prices can head towards 61.8% to 76.4% retracement giving the target as 18420 levels. Failure to do that can continue the sideways action with hurdle near 18730 on upside.

Post completion of wave b, we can expect wave c to start higher again in direction of the medium term trend which is up as of now.

Open Interest analysis -  Nifty 3rd chart shows sharp rise in 18600 Calls and Puts OI. It shows tug of war between Bulls and Bears for now and Option traders are creating short straddle positions expecting market to be trading in a range. Move below 18560 will result into short covering by put sellers are 18600 thereby putting pressure. On upside 18700 has major hurdle as per OI data.

In a nutshell, Neo wave and Open interest can be classic combination to trade effectively to predict the market direction and once two stage confirmation (Neo wave technique) is obtained one can get very high conviction Option buying opportunity.

Learn to Trade Options with KST and Elliott wave – 3 Days to go for Options Trading Using Technical Analysis (OTTA) scheduled on 10th and 11th December 2022, 5 Trade Setups for Option buying and selling along with Ichimoku Cloud, KST indicator, Volume and Open Interest profile, Option chain analysis, Payoff charts with Indicators like Bollinger Bands. Be a part of this Elite Traders community. For more information check here

Monday, December 5, 2022

Nifty Options Trading Using Volume profile – Big Player Activity!

Nifty Volume profile is classic way to see where the positions are built up by big players. To trade successfully one needs to trade in direction of the bigger positions.

Below is hourly chart of Nifty 18500 call option month end expiry that shows volume activity.

Nifty 18500 Call Options 60 minutes chart

Volume Point of Control – As we can see in above options chart Volume point of Control is near 350 where major positions are build. Prices came near to this POC after breaking out on upside. This type of pullbacks are opportunity for Options Trader to re-enter into the Call Options of 18500 strike price as this level will be defended.

Price action is also important around this area. Any close above the prior candle high is also confirmation from the area of significance i.e. the big players are active to defend their positions.

In a nutshell, one can create good risk reward positions as long as 18500 call options are not trading below 300 levels which will indicate dumping of this strike options.

This is simple but powerful way of Trading using simple Volume profile applied directly on the charts.

Options Trading Using Technical Analysis (OTTA) – Learn to Trade Stocks and Options using above method of Volume profile, Open interest analysis, Pay off charts and much more in upcoming Options Trading program scheduled on 10th – 11th December 2022. Also learn to apply KST Time Indicator for the very first time on Options and Trade successfully. Limited seats only, Fill the below form for more details - https://www.wavesstrategy.com/bmwoffer

Friday, December 2, 2022

Nifty Trading using Gann + OI + Volume profile | Ashish Kyal


Trade F&O using Candlesticks, Elliott wave & Time cycle on 03rd December 2022, Saturday from 11am to 1pm. Register here

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Thursday, December 1, 2022

JKTYRE - Investment stock selection using Elliott wave

We published about JKTYRE in September 2022 and predicted a possibility of Multibagger returns in the coming 2-3 years. This stock has managed to hold its gain and gave almost 28% returns in 2 months of time and made a lifetime high near 204.

Below is the chart which shows a detailed analysis of JKTYRE which helped to predict this target levels using Channels and Elliott Wave technique and Time cycle. We recommended this stock when it was trading near the 175 levels and was successfully able to catch the up move.

JKTYRE Weekly chart: (Anticipated as on 23rd September 2022)

JKTYRE Weekly chart: (Anticipated as on 27TH September 2021)

Multibagger stock recommendation: JK Tyre & Industries

Buy Price – Buy at CMP 175 and more on dips towards 155

Time Horizon –2 to 3 years

Investment – 5% of capital

Target price –??

Stop loss -??

Refer to the detailed research below.

Anticipated as on 23rd September 2022– Elliott Wave Theory

We are showing the weekly chart of the stock. Prices are moving in the form of Terminal impulse since the lows of 2009 so legs will be corrective. After completing wave (2) near the lows of 32 we are now in the strongest wave [3] this is the best leg to be a part of because it can fetch maximum gains in minimum time. The prices are also respecting the Ichimoku cloud and moving higher. Stock is moving precisely within upward slopping red channel and has taken support on a lower trendline in past sessions indicating its acting as support. As long as this support trendline remains protected on downside bias remains positive.

Happened as on 1st December 2022: The stock is moving exactly as we expected. Currently, JK TYRE is trading near 199 levels. It made a new lifetime high near 204 levels on 29th November 2022. The up move has been strong and we expect prices to achieve its target of .... levels in coming months. The stock is giving a return of 28% on average return in 2 months of span.

Join Premium Telegram Community for Multibagger stocks - 12 to 15 stocks in a year - Join here

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