How to do trade stocks like DLF using channels, moving average, wave theory?

In Technical analysis, Channels, Moving averages and Elliott wave theory provide very good combination to identify the trend and trade setup.

Below is the research that shows how all of the above methods had been combined together to trade DLF. It is amazing to see at times when these methods work so precisely irrespective of the movement in broader markets.

The below research is picked up from “The Financial waves short term update” published on 21^st December 2017 morning.

DLF 60 mins chart: as per chart published on 26^th December 2017

Happened as of 26^th December

Following is a gist of the research published on 21^st December

Elliott Wave analysis:

Anticipated – “As shown in daily chart, (shown in actual research report to paid clients) we can see that prices are breaking above the upper blue trendline as well. And it is now moving in the modified black channel. The 20 period EMA is providing crucial support at 230 levels. From wave perspective we can see bigger degree wave z in matured stage.

As shown in hourly chart, the rise witnessed in DLF is sharp in nature indicating momentum is building on upside keeping bias positive. Prices have bounced back from its support trendline showing how well the channel techniques work. As long as support of 230 is maintained on downside one can use creating long position for move towards 255 levels.

In short, DLF trend is positive as long as 230 is intact for a move towards 255.”

Happened: DLF moved precisely as expected. Prices achieved the target of 255 and has now arrived near the channel resistance. So what is next from here?

Charting Tool: Plot your chart on DLF

The above research clearly highlights how one can use the methods of technical analysis and trade on stocks. Get detailed insight into the entire research as there are opportunities everyday depending on which stock is showing good pattern. “The Financial waves short term update” in our flagship research report containing Nifty, Bank Nifty and stocks using not only above but many more methods of forecasting. See yourself how this is helping our existing subscribers. Subscribe NOW!

Election impact: Why is DLF underperforming?

Election impact: Why is DLF underperforming?

Indian equity market already looks to be celebrating the election outcome and expecting NarendraModi to be the next PM.

It seems expectations are high and next 6 months will be extremely crucial to see if Modi Sarkar, given the opportunity, is able to deliver or not. In prior election Nifty and Sensex had a circuit up closing in expectation of UPA government to deliver and this time the pre – election rally has been strong enough so far in expectation of NDA government to deliver. Case in point is the emotions that are going to elect the prime ministerial candidate this time are similar to emotions that are driving the prices of stock market. The 6 long years of bear market since 2008 onwards are clearly reflecting the frustration and strong emotional sentiments prevailing among the masses. Post such long period of sideways correction people wants radical change and it can clearly be seen with the slogans ongoing across the street “ABKI BAAR MODI SARKAR” We are not promoting or endorsing our preferences here but simply highlighting shift in Emotions which is currently seen!

Coming back to Equity market, a stock that has clearly underperformed and gave away the gains of rally is DLF.

After touching the highs of 185 the stock has been moving lower and has now given away exact 61.8% of its prior gain. The reason why this stock has not participated is again related to the event – ELECTIONS OUTCOME. It is assumed or rather predicted by equity market victory by BJP. During such scenario DLF that is speculated to have links with Vadra, connected to an extent with existing ruling government, will be the major loser in real estate space. Now, trading based on news will not yield any return because it does not help with timing and who knows to what extentDLF will suffer that too if opposing party forms the government. There is lot of “IF” associated for someone speculating based on news.

Even during such times it is better to stick with charts that show how prices have been moving and the crucial support levels. Above 60 mins chart of DLF, clearly reflects that prices are moving in downward sloping red channel and as long as this simple channel is intact trend continues to be negative. Break above 160 will be first sign of reversal which will indicate that the traders are now giving up on the news based speculation. On other side break below 150 will extend the downtrend further as it will break the Fibonacci 61.8% level as well! This information should be used to trade objectively rather than speculating the many “IFs”

Trade objectively and systematically, technical analysis and Elliott wave might not be always give expect output but it atleast has the ability to give objectivity to the trading decision with crucial risk management and stop levels, If you are wrong be out with short losses and trust me when you get on the right side of trend it will pay off for your hard work and money. It is better to base your trading decision on objective techniques rather than speculating on mere news or event outcome! Subscribe “The Financial Waves short term update” and see yourself the crucial levels which will decide the trend ahead on Nifty and stocks! Contact US for more details.

Trading stocks – DLF using technical analysis!

Trading stocks using technical analysis in a systematic way.

The below article shows triangle pattern applied along with Elliott wave theory.

Indian Equity market is moving very different compared to other indices of the world. Nifty made lifetime high of 6415, however, it failed to sustain at higher levels and moved lower constantly. In this subdued movement, a few sectors and individual stocks have been moving more independently.

To understand more about individual stock movement we picked up the DLF from the equity report- The Financial Waves STU which clearly shows that prices had done nothing in last 5 months (August to November 2013) but consolidated sideways between 120-175 levels. It seems that it has formed triangle pattern and currently it is in the last leg of the pattern as per advanced technical tool i.e. Elliott wave theory.

Triangles are probably the most difficult pattern to trade because prices simply trade sideways during this period.

DLF 120 mins chart:

Waves Analysis:

Below write up is of the previous day equity report

DLF one of the stocks from the Realty index which is trading in the range from last 5 months. Day by day, the range is becoming smaller and breakout on either side will indicate good trend ahead.

Since start of 2013 prices were moving lower in downward sloping channel where it got strong resistance on the upper line of the channel. However, for the first time prices managed to move above the channel and started to move higher…

As per wave perspective, prices are probably moving in the form of complex corrective pattern with triangle as the last part of correction. A move above … is important to validate this count.  However, if it does not happen, then it will indicate that intermediate wave …of complex correction is still ongoing.

Same as triangle pattern, there are many continuation and reversal patterns in technical analysis which works very well on stocks, commodities, currency and index.

The question arise that will it be able to break the pattern and resistance level OR it will move lower again? To know the answer subscribe our daily equity report –The Financial Waves STUwhich also covers comprehensive research on Nifty and 3 stocks on rotational basis. For more information visit to us at http://www.wavesstrategy.com/index.php/store.html or Contact us

DLF: Power of Failed Pattern!!!

DLF: Power of Failed Pattern!!!

By Waves Strategy Advisors, For more information visit www.wavesstrategy.com or write to helpdesk@wavesstrategy.com

There are various patterns in technical analysis. To name a few - Head & Shoulder, Triangle, Wedge, Flag, Double tops, Double bottoms, etc.

Each of these patterns has their own characteristics and success ratio. Technical analysis is all about probability and statistics shows the probability of success and failure for these patterns. Traders normally bet only on the direction of breakout of these patterns on the assumption that the pattern will work and reach the target as per it. This is a perfect strategy but one should also note betting on a failed pattern has better success ratio than a valid pattern. Also prices travel violently in opposite direction if a pattern gets failed.

A classic example of such failed pattern is DLF. This stock gave a breakout of the triangle yesterday but quickly reversed and re-entered the pattern before reaching the pattern target. The below chart shows DLF movement as of now:

DLF 120 mins chart:

The above chart shows that DLF gave a breakout from the triangle pattern which carries aggressive pattern target of around 275 on upside. In Triangle the post pattern implication is that normally prices travel the widest part of the pattern from the breakout. The conservative target is projected on upside from the start of the up move rather than breakout. In the above chart even the conservative target is not achieved let alone the aggressive target. Prices then quickly re-entered the pattern and started moving violently on downside. This is a classic example of failed pattern and trading failed pattern is much better as the violent move happens in opposite direction of breakout which can be clearly seen above.

We believe that markets are on the path of natural evolution and one has to be dynamic enough to understand and accommodate that evolving nature. Failure to do that can result into serious errors on part of analysts and traders!

Do not get carried away with the overly optimistic views for Indian markets. Think objectively. To know more about the daily research advisory write to us at helpdesk@wavesstrategy.com or call on +91 9920422202 / +91 22 28831358

DLF shares fall over land scam or price pattern indicated fall was imminent..

The following article is written by Waves Strategy Advisors Pvt. Ltd. that publish equity, commodity and currency research reports. For subscribing daily equity research report that shows Nifty movement and stocks which gives good opportunities you can visit www.wavesstrategy.com or write to helpdesk@wavesstrategy.com

There has been news everywhere that the DLF shares have been falling on back of the fresh land scam

By anti corruption reformist Arvind Kejriwal.

Business Today mentioned that, “DLF shares on Wednesday fell over 4 per cent after ArvindKerijwal leveled fresh allegations about the company's nexus with Robert Vadra andHaryana state government”

If stocks moved after the news were announced everyone would act on news and would benefit from it. But if news would have been driving the prices than equity markets would not have rallied over past 2 weeks with so much of political uncertainty, inflation, slowing growth and negative news from global markets. We at Waves Strategy use Elliott wave theory and other technical tools to identify the price movement and forecast where it is headed. News or events produce only short term spikes and the major trend then resumes.

The below chart of DLF clearly shows that prices were at very strong resistance of 250 levels. This level was taken out only once in February 2012 which was also a flase breakout. We can clearly observe that prices have been constantly failing to move above 250 since July 2011 and has turned down towards 175 everytime it reached this strong resistance level.

This time as well prices have failed to take out 250 and started moving down strongly.

Our earnest advise to our readers is not to act on news but to stay ahead of the crowd and see price patterns and Elliott Wave to see where prices are headed from short to long term. Trading based on news is very subjective and not always logical.

For more information on various products that can help you take calculated and systematic trading decisions write to us on helpdesk@wavesstrategy.com

Happened: Negative Confirmation!

DLF

Hindalco

ICICIBANK

Sensex

Explanation:

As mentioned on 2nd April (Sunday) Sensex did open a gap down on Monday and we did see an impulsive move down continued today taking Sensex below 17200. This wave down today looks like a start of minutte degree wave 3. Given the steep fall in US and European markes expect selling pressure to intensify further tomorrow.
DJIA is falling with rising US Dollar, steep rise in VIX, rise in Bond prices, steep fall in copper, silver, oil all pointing only in one direction!
We also said how badly complacency will be punished and that is what has started.Immediate target for Sensex now lies at around 16000 where it shall find some support before another leg down.
I have said in my previous blogs many times that the top outperformer - METALS will be the worse performer. The time has gone for bottom picking but using every rise to go SHORT.