Nifty trading range and application of Bollinger bands!

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Nifty: How to use BollingerBands with Timecycles for trading?

Nifty: Application of Volume at Price indicator for trade setup!

Volume at Price indicator provides very important support and resistance levels and helps in understanding the reversal areas. We applied this indicator on Nifty and it helped us to capture the recent down move. You can see the bounce back exactly from this indicator support levels.

Below is the research picked up from “The Financial Waves short term update” daily research report.

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Nifty daily chart:

Following is a part of research mentioned in the daily report published on 16th April morning before markets opened:

In previous update we mentioned that “Nifty touched our next target of 10470 and it is prudent to book partial profits at current levels for longs initiated near 10250 – 10280 levels. For remaining positions one can continue to follow trailing stop method”

US attack on Syria might result into short term volatility in global markets especially commodity. It is therefore important to see how prices behave after the opening move. In addition to this Infosys results can also lead to pressure on IT stocks. However, we have observed that during such events there is handful of stocks which manages to balance out the index and the sharp decline is averted. In the past as well when IT companies corrected sharply after result announcement there were other stocks that kept index buoyant.

As shown on Nifty daily chart, prices have now touched the upper end of the Bollinger bands and formed a DOJI candle in previous trading session. There can be some consolidation in the zone of 10350 – 10550 levels.

We are also showing Volume at price indicator. This is an excellent indicator that measures how much volume has gone in that specific price range. The peak can be seen near 10300 – 10350 zone. So this level will now act as a very important support. This is also the pivot low seen during the recent up move. Any dips near to this level will result into an upward thrust. So we will stay bullish as long as the zone of 10350 – 10300 remains protected.

In short, expect range bound movement between 10400 – 10550 levels as long as 10350 remains protected on downside.

The above research clearly shows how one can use a simple indicator for deriving the important levels and trade setup can be formed around that. Based on above one can form a strategy of going long near 10400 levels with just 50 points of stop at 10350 and expecting a target near 10550.

Happened: Nifty touched the high of 10557 in today’s session itself!

Get access to “The Financial waves short term update” and see yourself power of various indicators like RSI, Volume at price, Channels, Moving averages applied along with Elliott wave counts. So what is next from here? Subscribe here

Nifty scenario analysis – Applying Bollinger Bands®, Moving averages, Wave theory!

Nifty has been moving violently between important levels but has managed to protect the support and resistance all the while.

Nifty had a positive start yesterday and prices touched intraday high of 10279 levels. However, post 1 pm the selling pressure started building up and there was a sharp fall towards 10110 levels. This was a fall of nearly 170 points from the highs in short span of time. The fall was across the board with high beta indices also losing more than 1%. The selling emerged after the announcement of China imposing additional tariff on U.S. products worth 50 bln USD. The short term news events are resulting into random and volatile movement but prices are still trading within a range on net basis.

Nifty 60 mins chart: Preferred counts

The below research is picked up from daily equity report – The Financial Waves short term update

Following is the Nifty scenario analysis:

Scenario 1 – This is our preferred scenario as the majority of stocks are still lying near the support areas and the stocks like SBI, Tata Motors, BHEL that were leading the fall had shown faster retracement above the last falling segment. So there is possibility that Nifty has not completed wave g but it is in its final stages and move back above the high of 10280 will confirm this.

As shown on hourly chart, Nifty is back towards its Bollinger bands support and it failed to close above the same during the day. Also the reversal came from red channel resistance. This increase the odds that wave g is forming an Extracting triangle pattern and post its completion we will see a positive breakout. We will stay with this as preferred scenario as long as strong momentum with break of 10000 is not seen from here.

Scenario 2 – (shown in actual research report) ……….

So for now it is best to wait for a clear trend to emerge as prices are whipsawing around crucial areas thereby creating a challenging trading environment. Now a decisive move back above ……… will result into a positive breakout. Yesterday’s close is back towards the Bollinger bands support area which is at 10120 zone. Let us see if there is a positive attempt in today’s session thereby resulting into no net progress but high volatile movement.

In short, Nifty can continue to trade within ……….. levels. Buying near supports and selling near resistance is going to be the best strategy for now unless a decisive breakout in either direction is seen. We will stay with scenario 1 as preferred count for now and only a break below …….. will force us to adopt scenario 2…

To know what is the scenario 2 in case prices reverse again and what are the positive targets from here on get access now to “The Financial Waves short term update” We turned bullish near 9950 amidst all the pessimism and Nifty is already at 10280 levels. So what is next from here? Subscribe NOW annually and get 3 months of Monthly research report along with it. Visit here

How to trade Nifty on intraday using basic Technical analysis & Bollinger Bands®?

Nifty formed a low near 9686 on 11^th August 2017 and post that prices have been moving in overlapping fashion with no clear trend.

It is normal to see an overlapping move after a strong trend. The fall from 10130 to 9685 on Nifty was sharp and fast and for the first time in 2017, prices have failed to show strong momentum from channel supports.

Below is the hourly chart of Nifty shown with application of Bollinger Bands. The best strategy during such scenario is to buy near supports and sell near resistance.

Nifty 60 minutes chart showing Bollinger Bands:

Even during this non- trending move it is possible to trade the markets on intraday basis. Below gives a few of the past trading strategies given on Nifty before the market opens. These strategies are given on daily basis in “The Financial Waves Trading update”

Trading Strategy given on 4^th September - Short positions can be created on move below 9900 with day's high as stop and target of 9860. BANG ON!

Happened: Nifty moved precisely as expected on 4^th September and made a low near the level of 9861 after breaking below 9900 levels.

Trading Strategy given on 1^st September - Long positions can be created on move above 9940 levels with 9900 as stop and target of 9980. BANG ON!

Happened: Nifty moved precisely as expected & touched the target level of 9980.

Trading Strategy given on 30^th August- long positions can be created on move above 9850 with 9800 as stop and target of 9900. BANG ON!

Happened: Nifty made a low near 9850 and then moved towards the target of 9900 levels.

The above trading strategy has worked out extremely well irrespective of the non-trending move. This clearly shows the power of the techniques that we are applying and how it can be capitalized using the Elliott wave theory.

Subscribe NOW “The Financial Waves trading update” you will also get detailed chart of Nifty along with Trading strategy that explains the current state of markets from short to medium term perspective. 

Nifty: Is it forming “h shaped pattern”?

Understanding the trend of Nifty with the application of Elliott wave, Bollinger Bands®, trendlines, RSI!

In last few days Indian Equity Market has witnessed high volatility in which sharp downfall from 10140 to 9685 and then sharp rise towards 9948 level. Then again there is retest of prior low. This kind of movement is enough for traders to stop guessing the market. That is why use of objective technical tools is must in this kind of market to capture the next trend.

In the past occasions many times we have seen formation of “h shaped pattern” which is not given in any technical analysis book but it is founded by us many years back. In this pattern, prices retest the earlier lows which look like alphabet “h” and that is why we have given the above name to the pattern. Below is the past of research taken from “The Financial Waves Short Term Update”.

Nifty daily chart:

(Part of research taken from Equity report dated 21^st August 2017)

Wave analysis:

“In Fridays trading session Nifty had Gap down opening at 9865 level and throughout the day selling pressure was witnessed towards 9780 level. By end of the day some pullback was witnessed which lead to closing Nifty closing near 9835 level. IT was the top most losing sector which lost more than 2%. Infosys closed down with loss of more than 9% on back of Mr. Sikka’s resignation.

On a weekly basis Nifty has made small bullish candlestick pattern after the bearish candlestick formed in last week. In current week prices have protected the prior week’s low of 9685 level, so as long as prices remain above this level weekly bias will remain sideways to positive.

As shown in daily chart, the sharp down move witnessed in last week has open up many possibilities. We expected the start of wave c of Triangle pattern however recent down move is suggesting that wave b might be still ongoing. In the past we have observed that “h shaped pattern” worked very well. So there are chances that prices retest the earlier low near 9685 level and post the same it can reverse on upside. Nevertheless as of now it is important to wait for development of pattern along with break of crucial support and resistance levels. 9685 and 9948 level is the broader range.

(60 mins chart is not shown here which is in original report)

As shown in 60 mins chart, prices have taken U turn from 9948 level however yet there is no such confirmation for start of next trend. Such kind of sharp rise followed by sharp fall can result into sideways action. Bollinger Bands works well during the consolidation. As of now prices are near to the lower band …..”

Nifty once again has arrived at the crucial juncture from where next sharp trend can emerge. To know the important reversal areas and Elliott wave pattern, get access to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.

ICICI Bank reversed exactly from important Channel support but credit goes to Essar news!

Essar Rosneft deal will help Essar pay back its debt to ICICI Bank that helped the stock to gain by nearly 7%. Is it really the news that drove stock higher which was already expected?

It is surprising to see such co-ordination between the news and the technical study. Exactly from the previously mentioned support of 240 levels on ICICI Bank which is also channel support prices bounced sharply and the credits are given to the Essar Rosneft deal.

Yesterday this stock was up by 7% and managed to hold Bank nifty on a positive note.

ICICI Bank daily chart:

Elliott Wave analysis:

The daily chart shows that in the start of 2016 prices are moving in primary wave X. The channeling technique has been working well on the above chart and yesterdays bounce is the best example to look upon. Now from medium term perspective trend will be positive as far as this support line is intact. On upside we should see up move towards the channel resistance in the form of minor wave c.

As shown in 60 mins chart, (shown in actual research report)……

Nifty has shown a sharp rise so far in current trading session and is about to cross above 8600 levels. We have been mentioning the key support levels in our research report and prices respected that level even now. In range bound markets it is crucial to buy near supports and sell near resistances rather than trading the breakouts. We combined various techniques like Bollinger Bands, Moving averages along with Elliott wave to understand the reversal areas.

The above research is picked up from the daily report – The Financial Waves short term update published daily before Equity markets open. The report contains detailed technical analysis along with Elliott wave chart of Nifty and different stocks. For subscription to this research report simply visit Pricing page and select Equity research report.

Attend the two days online webinar on “Combining Basic Technical analysis along with Elliott wave and Time cycles” to be held on 20^th October and 21^st October 2016. Now distance is not a problem and the recordings of the session will be made available in case you miss it due to technology issue. Along with it get access to Ashish Kyal, CMT directly by posting discussions or writing to him directly. Also get access to research report FREE for one complete week! For registration Contact US now!

Bank Nifty: Applying Bollinger Bands® and Channels on monthly charts

Bank Nifty is a very important leading indicator for Equity markets. Channels and Bollinger Bands provide lot of clues to the ongoing trend along with important reversal areas.

The below chart of Bank Nifty was published in previous months research report – “The Financial Waves Monthly update”. Prices have continued to behave as expected and are still contained within the bands. Elliott wave counts are purposely removed and is shown in the actual research reports.

Figure 5: Bank Nifty monthly chart

Post forming a low at 13400 level Bank Nifty has continued to move higher protecting the important support on downside and as of now trading at the high of 2016. The recent breakout on upside in Nifty after the month long consolidation and outperformance of Bank Nifty is creating euphoria and understanding the overall trend as per Elliott wave theory is required.

Bollinger Bands: During the range bound market, Bollinger Bands work well. We can see that prices are now close to the upper Bollinger Bands. As per this resistance of the same is placed at 20600 level. So it will be crucial to see if prices take halt near the same level or not over medium term.

Monthly bar technique: as the rally is corrective in nature, one should use other techniques like monthly bar technique to be in the trend. From last 6 months prices have been protecting the low of prior bar on closing basis. This is simple but very important tool to ride the trend. As per this, low of 18440 should act as important support and as long as this level is intact one should avoid catching a top.

The daily chart shows that prices have been moving higher in channelized manner which is why the entire up move is ………. As of now there are no exhaustion signs and it is better to follow the trend….

By adding detailed Elliott wave counts to the above chart the entire pattern suddenly becomes all the more appealing.

“The Financial Waves monthly update” is published every month providing medium to long term outlook on Nifty, sub-Indices, stocks, Global markets and much more. Contact US to get your copy of the research report now.

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ICICI Bank applying Channels, Time Cycles, Bollinger Bands® and RSI!!

Recently Bank Nifty failed to show momentum above 18000 level and reversed on downside sharply. During such volatile market one should be ready with the trading strategy on different stocks. ICICI Bank is one from the private banking space which has been underperforming from medium term perspective and finding strong resistance in the zone of 258-260 level. What should be the trading strategy applying different techniques like Channels, Time Cycles, Bollinger Bands, RSI and Elliott wave? Below we have shown part of research taken from “The Financial Waves Short Term Update”which was published in the today morning.

ICICI Bank daily chart:

(Part of research is taken from The Financial Waves short term update report)

Wave analysis:

Bank Nifty failed to sustain above 18000 level and has moved lower towards 17600 in last session losing 1.3%. In last session prices also had Gap down opening and post that it has sustained below the same. So over short term as long as Gap down area is unfilled short term trend will remain negative. During such kind of trading environment one should use selling strategy in stocks which has reversed from the crucial resistance zone and ICICI bank is one of them.

The above daily chart indicates that as compared to other private banks, this stock failed to show any deeper retracement on upside and still trading way below its 52 weeks highs. This suggests that this stock is underperforming. As per wave perspective, the rally from the low of 180 to 260 is corrective in nature which suggests that another wave…… of third standard correction is ongoing.

During the range bound market Bollinger Bands works well. Recently prices tested the upper band of as shown on daily chart and reversed on downside sharply. RSI has also reversed from 70 level which was previous resistance and hence downside correction from here may have started. Apart from that 68 days topping Time Cycle is also due which has formed important tops in past. Hence one should be cautious now.

To know the Elliott wave pattern on short term chart with important reversal areas, subscribe to “The Financial Waves Short Term Update”and for more information visit Pricing Page

Register NOW for one of the most Advanced Training on technical analysis – Neo wave applied along with Time cycles to understand the key reversal areas and pattern analysis for trading and investment decisions. We have been able to capture most of the important reversals including the recent top. When Nifty formed a low near 6825 on 29^th February and reversed back we published extremely bullish report the very next day using the above techniques and now when majority were expecting prices to continue the strong uptrend we were constantly mentioning weakness seen in the broader market as majority of stocks failed to participate even when Midcap and Smallcap indices were positive. Two days workshop will focus on various tools we use to identify and trade stocks that also helped in winning the stock trading contest on ET NOW stock game show by substantial margin. Visit Training on Neo wave now and avail Early Bird offer valid only for two more days. Also receive FREE Neo wave report for a month to learn practical application on actual charts as the pattern develops.

Time cycle of 54 days, Neo wave and Bollinger Bands® does the magic again!

Nifty had a huge Gap up opening and prices have taken out the level of 7820 as of now.

This might have been a big surprise for traders expecting market to move below 7680 levels. Also the credit of strong rise will be given to positive Global markets and strong close by US Equity index – DJIA. Simply think if we were so highly correlated with US markets then DJIA is trading near its life time highs and we are still nearly 15% below the highs.

Time cycles play very important role in order to understand if sentiments are about to change. Everything in the world is governed by Time and so does stock market. Look at the below 54 days Time cycle which we have mentioned about few weeks back itself and prices formed low very close to it. However, Time can be a tricky element and it is important to use other techniques like Neo wave – Advanced Elliott wave, Bollinger Bands to identify the key support area and for price confirmation as well.

Nifty daily chart with application of Elliott wave, Time cycles and Bollinger Bands

On 23^rd May morning research report “The Financial Waves short term update” we mentioned the following:

Time cycle of 54 days is also due today which is normally a bottoming cycle. This cycle worked exceptionally well during the downtrend from 9119 to 6825 levels. However, as prices have broken above the channel for first time since the top of 9119 there is possibility that the cycle might change. However, today being the 54^th cycle day we will closely observe if the buying interest starts generating from here on.

On 24^th May morning research report following was mentioned:

Application of Bollinger Bands: The daily structure of Nifty suggests that prices are moving within the band and currently it is approaching towards the lower support area of Bollinger bands. Still there is no strong momentum as the band is intact and prices have not entered the downward sloping channel

On 25^th May morning research report following was mentioned:

Application of Neo wave pattern: As shown on daily chart the rise from 29^th February 2016 onwards is in double corrective pattern and prices are now in second correction. The high of 7992 and low of 7678 has been protected for many weeks now and there is a clear contraction with no trending move in either direction. The basic two patterns that exhibit such behavior is either a triangle or a 7 legged Diametric pattern which has first half as contraction and the second half as expansion. Prices are currently in wave d and post its completion we should start seeing wave e on upside. ……..For now, one can create long positions if Nifty manages to close above 7820 for a move towards ……. levels initially. A strong momentum above this level will open up further positive possibilities. On downside ………… is going to act as short term support..

Analyzing complex corrective pattern is not always easy and it requires combination of different techniques to be on the right side of the trend.

Subscribe NOW to the daily research report “The Financial waves short term update” that covers detailed Elliott wave, Time cycles, Bollinger Bands and other techniques applied on Nifty, Bank Nifty, stocks. For subscription visit Pricing Page.

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Nifty strong selloff: Power of 49 days Time Cycle!

Global Equity Markets has showed sharp fall in current week on the fears of slowdown in growth of China. Today was the 2nd trading session in this week where Shanghai Composite moved lower and closed down with 7% loss. This is the justification for the current selloff in Indian Equity Markets however based on Advanced technical concepts from the last week of December 2015 we were maintaining our cautious stand on Nifty due to slower nature of rally. Along with all this we also use Time cycles to time the market. Timing the market is very important from trading as well as investment perspective. Below we have shown part of research taken from “The Financial Waves Monthly Update” published on 5^th January 2016.

Nifty daily chart – 49 days Topping Cycle and Bollinger Bands

(Part of research taken from “The Financial Waves Monthly Update”)

49 days Time cycle: We have seen bottoming Time cycles working very well but at times it is important to look at the Topping cycle as well. This 49 days Time cycle is shown on Nifty daily chart. We have been using this topping cycle for many years now and it has produced the desired outcome most of the time. As per this important tops are formed every 49 days and we can clearly see the top of August 2015 post which there was severe selloff which was also formed on this cycle day. After 3 months we have seen a fall of more than 150 points on Nifty on 4^th January 2015. This indicates short term bearishness for few days.

Post forming to at 49 days Time cycles, Nifty did not look back and selloff is still ongoing. Now question arises still how much pain is left? Nifty is approaching towards the low of 7550 formed in early part of December 2015. What is next?

Subscribe to “The Financial Waves Monthly Update” which is published now for long term forecast and to know the short to medium term trend subscribe to “The Financial Waves Short Term Update” . For more information visit Pricing Page

Nifty continues to trade in complex Elliott wave correction..All eyes on FED meeting!

Bottom Line: Nifty continues to trade near the important red channel support as shown in 60 mins chart. Next few days of price action will be crucial now.

Nifty daily chart:

Nifty 60 mins chart:

Wave analysis:

In the last update we mentioned that, “due to sharp rise followed by sharp fall we have applied Bollinger Bands which is contracting as of now. Prices are trading near the support of lower Bollinger Bands as well as the zone of channel support. Only decisive move below 7540 will indicate that downtrend is extending further.”

Last trading session was highly volatile where Nifty had Gap down opening at 7550 level but managed to protect important support of 7540 and showed recovery on upside towards 7650 levels immediately. The most awaited US Federal reserve’s meeting is scheduled on 15-16 December and it is expected that US will raise key policy rates in almost a decade. It is going to be an interesting event and the way global markets will react over short term. Few weeks back when FED chairman Yellen announced most likely hike in December US equity market – DJIA was up by more than 300 points on same day. It is tricky to gauge equity markets reaction to the news but better to understand that markets will eventually do what it has to irrespective of the event.

Case in point: It is going to be a volatile week and we think FED will be increasing interest rates this time. The reaction can be positive but we will let market decide where it wants to head. The Global markets are going to react atleast during opening session in similar fashion to that of US equity markets with a big Gap. So trade light and close over next two days is going to be crucial. Nifty is also near the crucial 7540 level of previous low made in September which it protected yesterday.

From sector perspective, Bank Nifty which was the major loser in Friday’s trading session managed to trade in a range but buying is still not witnessed in Banking stocks which is little concerning. Midcap and Smallcap indices closed in the green territory.

Now as per Elliott wave pattern Nifty is moving in second correction post wave x as shown on daily chart post completion of which we should see break above the channel. However, the fall has been in complex pattern and it will be only above 7800 we will get break above the channel providing first positive confirmation and faster retracement above 7985 will provide second stage positive confirmation that medium term trend has reversed on upside. This method is known as 2 stage confirmation as per Neo wave which virtually confirms a strong reversal over medium term.

Now coming to short term we can see some buying emerging from lower levels near the channel and Bollinger Bands support as shown on 60 mins chart. The internal structure is not clear and it is crucial to see break above 7770 or below 7540 for a clear trend to emerge.

In short, expect Nifty to trade in a range between 7540 and 7770 over short term. Break of these levels will result into trending move in that direction. We are keeping a close watch on Banking index as it has still not showed any positive signs and of course even on FED meeting outcome which will drive global markets atleast over short term.

The above strategies are mentioned in our daily research report “The Financial Waves Trading update” that covers in-depth analysis on Nifty using Elliott wave and trading strategy. In case you would like to know the trend for stocks as well subscribe now to “The Financial Waves short term update” that covers Nifty and stocks outlook.

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Nifty: Application of Bollinger Bands® Elliott wave structure and Momentum for capturing intraday reversals!

Nifty has moved sharply lower after coming close to the psychological level of 8000. During the up move of 9 days from 7725 levels there were only a few stocks from the index that participated and majority of the stocks moved in a range. Also the momentum was not picking up which was measured using RSI indicator. A few of the technical studies helped us to stay alert and not get carried away in the 9 days of slow up move. We were constantly talking about weak momentum and warned our subscribers that one minor push on downside cannot be ruled out before we bottom out.

See yourself below from the chart of Nifty picked up from daily research report “The Financial Waves short term update”

Nifty 60 mins chart: (published on 2^nd December 2015)

Happened: as of today 2.50 pm

           

Wave analysis:

Following was published on 2^nd December 2015 in the morning:

In previous update we mentioned that, “Today there is RBI Monetary policy meeting. In the last meeting of 29^th September 2015, Mr. Raghuram Rajan has already reduced the key policy rates, so this time there is high probability that Status Quo will be maintained.”

As expected RBI kept the policy rates unchanged. ..Yesterday was another day where prices failed to generate the momentum even after taking out the high of prior bar of 7966 level. During the strong trend momentum increases on upside as trend goes further however in current trend momentum has not picked up yet. These are the conflicting signals which indicate that one should stay alert in case of sharp reversal.

On short term charts also Bollinger Bands have contracted which suggests that ongoing trend is not strong till now. We have been mentioning this because during the strong trend Bollinger Bands tends to deviate or expand from the mean which we have not seen till now.

In short, outlook remains the same that Nifty has been failing to generate the momentum on upside. Strong hourly close above 7970 is required to continue the up move in form of wave (x) however any move below 7865 will be the sign of negativity.

Happened: Our cautious stand has been vindicated and as soon as the support level of 7865 was broken there the downtrend resumed.

I have observed that as long as the pattern is clear predictability is high and one can indeed capture the swings irrespective of events. We are now again approaching towards the time zone where slowly the indicators are getting aligned together but this time not on downside! Yes, we have captured brilliant moves on downside but this time the indicators are slowly shifting their direction to up and so is Time cycle.

To know why we are now arriving at crucial juncture subscribe to “The Financial Waves short term update” and see yourself how most basic indicators can also be used for the best of the intraday trade setups. For subscription options visit Pricing Page and select Equity research report, pay online and get instant access NOW!

What is Elliott Wave, Bollinger Bands®, PCR Ratio, Time Cycles suggesting for Nifty Trend?

Bottom Line: Nifty traded in a range as expected. Sideways action can continue for few more days!

The below research is picked up from "The Financial Waves short term update" which is published daily in morning before equity markets open. This report has Elliott wave and other technical tools applied on Nifty along with 3 different stocks

Nifty daily chart:

Nifty 60 mins chart:

Wave analysis:

In previous update we mentioned that, “In short, there is some loss of momentum on downside. Partial profits can be booked on existing short positions and remaining can be trailed to the highs of 7870. Move below 7710 is important to resume the downtrend. For now expect few days of sideways action!”

Nifty moved in a range yesterday as expected. Even when the Global markets were strong positive prices failed to generate any strong positive momentum and traded in a narrow range. High made was at 7860 which was close to the level of 7870 mentioned as short term important level.

Measuring change in Sentiments using PCR: Put Call ratio has reduced drastically towards 0.72 levels. This level is not seen for many months now. A higher value indicates more put built up whereas a lower value indicates some buying interest emerging. Many technical analyst use this as a contrarian indicator but we have observed it to be working more number of times in favor rather than taking a contrarian stand. So a lower value in PCR ratio indicates more Call option builtup compared to puts which is a positive signal. However, this indicator acts only as a warning signal and we will not act on this alone. As mentioned earlier break above 7937 which is last leg of falling segment is must for confirming positive outlook.

Bollinger Bands: A sharp reversal on upside following a sharp selloff usually results into range bound action between the Bollinger Bands. We have shown these bands on hourly chart and the resistance is placed near 7870 whereas support is at 7720 levels. A decisive close above or below these levels will be required for short term direction.

Elliott wave pattern: The selloff from the highs of 8336 is in the form of triple correction and prices are currently in third standard correction. This third pattern fell short of the target level of 7600 which implies that it is only a part of wave (x) or this correction is forming a triangle pattern as shown on the hourly chart. This is only one of the probable scenarios and next few days of price action is now required to confirm the pattern under formation. 

Predictability and accuracy is also cyclical to an extent and when prices are near the reversal areas one should wait for break of levels for clear trend confirmation. We have enjoyed very high degree of accuracy so far and it is now time to keep the emotions under check and let us wait for market to decide in which direction it wants to head again. Technical indicators are suggesting that the down trend is in matured stage.

In short, expect range bound movement to continue for few more days. Decisive break above 7870 followed by 7940 will be positive whereas any move below 7700 will resume the downtrend. Bank Nifty has 108 days Time cycle low on 20^th November and we are keeping a very close watch on this index for leading indications!

To subscribe, visit the Pricing Page - http://www.wavesstrategy.com/Pricing.aspx and select "The Financial Waves short term update" See yourself what is the future course of action for Indian equity markets and stocks! You can also reach us on +91 22 28831358 or +91 9920422202. For more information Contact US