Where is LIC Housing Finance headed? Will it reverse on upside?

Where is LIC Housing Finance headed? Will it reverse on upside?

Nifty has continued to hit life time high levels with strong euphoria. However, not all sectors have been contributing in the ongoing up move.

Housing Finance sector which was darling for traders and investors few weeks back is now going through some short term correction.

The below research was published in our daily equity report “The Financial Waves short term update” that showed LIC Housing Finance daily chart as well in addition to below hourly chart.

LIC Housing Finance 60 mins Chart:

Elliott Wave analysis: (picked up from the research published today morning)

Housing Finance sector as a whole has been going through profit booking from last few weeks. In this sector, LIC Housing Finance is one such stock has been going through downward correction since June 2017. In case of any weakness in broader markets, this stock can move lower sharply.

The weekly chart (shown in actual research report) shows that the up move ongoing from the mid of 2013 is corrective in nature and it has been forming Zigzag correction pattern. In the month of March 2016 intermediate wave B completed its course and since then intermediate wave C is running its course. The fall witnessed from 796 to 596 has overlapped with wave i territory which indicates that Ending Diagonal Pattern is under formation. The ongoing fall is in form of minor wave iv which has arrived at the channel support but yet there are no signs of reversal. From last 8 trading session prices have failed to close above prior bars high which suggests ………….

As shown in 60 mins chart, prices have been forming double correction pattern and as of now minute wave c of second correction pattern is ongoing. As per the channeling technique, prices have lot more room to cover on downside and hence any pullback is going to provide shorting opportunity as long as ….. is intact on upside.

In short, LIC Housing Finance trend remains on ………. and prices can move towards …. level where channel support is placed.

Charting Tool: Plot your chart on LIC Hosing Finance

The above chart shows how we can apply Elliott wave along with other technical analysis method. You can get access to “The Financial Waves short term update” our flagship research report on Nifty, Bank Nifty and stocks that give trade setup using Elliott wave and various indicators. Subscribe NOW

Is assembly elections 2016 outcome already discounted by Equity markets?

Assembly elections 2016 counting is still ongoing but markets are still stuck in a range. There is no trending move for many weeks now and it seems the news is already discounted.

I distinctly remember the euphoria created before the central elections outcome in 2014, Nifty formed a low near 5118 levels in August 2013 a whole 8 months prior to the election outcome. On the Election Day Nifty in fact touched the high of 7563 on 16^th May 2014 – election outcome before reversing back and entering into red territory momentarily. This has been clear reflection that the event outcome was already discounted way before and surprisingly such landslide victory by BJP that no one would have imagined resulted into non-event when Nifty turned flat even though only for brief moment.

Case in point is forecasting the movement of Equity markets after the news or event is like walking blind folded. State Elections results will surely result into short term spike or volatility probably a random movement but eventually the original trend or pattern will resume its course.

We at Waves Strategy Advisors, believe that markets are patterned and follow a rhythmic path determine by Elliott wave. Also everything is governed by natural laws and so market also follows Time cycles that is integral part every creation.

Now look at the below chart of Nifty along with forecast done on 12^th May 2016 morning research report “The Financial Waves short term update” before equity markets opened:

Nifty 60 mins chart:

Nifty 60 mins chart: Happened so far

The first chart of Nifty was shown on 12^th May 2016 even before equity markets opened and we mentioned that following:

In short, yesterday’s volatile move has not changed the structure so far and prices have managed to protect the important support areas. A spike high or low act as important levels and so move above  7900 is crucial to resume up move towards …….. Slow drift with lack of momentum will further confirm our assumption of Ending diagonal pattern. Nifty can follow the path as shown on above chart!

Happened: It had been a week earlier we have showed the path of Nifty with very clear pattern description of Ending Diagonal structure. Prices have behaved very closely to the path so far and have exhibited perfect wave characteristics. Such movement has happened irrespective of the Mauritius Tax treaty even or the state election outcome. Now you decide yourself if markets really depend on external factors or Are already discounting the Elections outcome?

“The Financial Waves short term update” is a daily research report that contains detailed Elliott wave counts on Nifty, Bank Nifty and stocks along with applied technical tools and explanation. Markets do not move randomly but in predictable patterns that can help us making right trading decisions! Know more on how to get accessto this research report HERE!

Shanghai market crashes another 7%. What to expect next?

Chinese Equity Market Shanghai Composite is in limelight from last few months now. We can see that volatility in Global Equity Markets has increased due to the slowdown and growth issue in China. On 4^th January 2015 Shanghai tumbled 6.9% on back of growth issues. In fact even today there was severe selloff witnessed where market fell by more than 7% which has led to suspension of trading for today. This has been keeping Global Equity Markets on the edge. It is important to understand the overall structure of Shanghai Composite.

In order to know where Shanghai will head itself and what are the crucial levels subscribe to “The Financial Waves Monthly Update” which covers in-depth research on various asset class viz Global market, Nifty, Bank Nifty Currency, Commodity and Mutual funds. Below is the part of the research:

Figure 11: Shanghai Composite weekly chart

As shown in weekly chart, an important top for this market was placed in the year of November 2007 as post that prices showed sharp reversals on downside and flashed its red signals. However 2014 proved to be a year of revival as prices managed to move higher in an impulse fashion which helped the market to head towards the highs of 5178 levels. Looking at the current scenario, prices are showing retracement of the prior up move which started from the lows of 2100 to the highs of 5178. This has surely put a halt to the upside move but one needs to understand that correction do happen in any particular asset and post its completion we might again see the resumption of the ongoing trend.

Case in point: There was no such optimism seen when market showed decent rally from the lows of 2100 to the highs of 5170 which means more than 100% of appreciation in terms of price. Whereas the recent down move has put in too much of pessimism in the mind of people even when Chinese market has protected its lows made in August 2015. For objectively understanding the trend we use Elliott wave technique.

As per Elliott wave perspective, prices completed bigger degree wave III near the highs of 6124 and post that showed 7 years of correction in the form of (A)-(B)-(C).  Wave (C) formed Ending diagonal pattern and post its completion there was sharp reversals seen on upside. This rising segment indicates that cycle degree wave …….. completed its course in mid 2014 and next leg has taken its place in the form of wave ……

Spikes are very important as it forms important highs and lows and break of the same can result into trending move on either side. Such spike was witnessed in this index during August 2015 where prices made a crucial low of …….levels. So as long as this level is protected we can continue to expect range bound action and on upside break above ……. will give us the confirmation that medium term uptrend is resuming again.

In a nutshell, ………….

To know what is next from here in Global markets along with detailed medium term outlook on Nifty and Bank Nifty subscribe to “The Financial waves Monthly update”. Also get access to daily short term research report – “The Financial waves short term update” which covers Nifty and stock on daily basis. It is during such volatile environment objective way of research is most important. Do not miss out on this strong trending move and find out crucial support or resistance levels from Trading to Investment perspective. For subscription options visit the Pricing Page.