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 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!

Nifty: Application of Neo wave, Channels, AD Line, Moving averages!

Understanding the trend of Nifty with application of basic and advanced technical analysis concept along with Market breadth indicators.

Nifty has made life time high at 9532 level in the current week and post the same there is some sideways to negative action happening in today’s session. We believe that price is the supreme indicator and thus advanced concepts like Elliott wave, Neo wave helps us to understand the trend. Apart from this it is also important to looks at market breadth indicators such A/D line – Advance/Decline line. Breadth indicator is nothing but it gauges the percentage of stocks which is uptrend as against to stocks which are in downtrend. Declining AD Line is always a concern as it suggests number of stocks in decline is higher as compared to advancing stocks. Below we have shown part of research taken from “The Financial Waves Short Term Update” which was published in today’s morning.

Nifty daily chart:

Wave analysis:

(Part of research taken from today’s morning research report – “The Financial Waves Short Term Update”)

“In the previous update we mentioned that, “Nifty trend remains positive as long as 9370 is intact on downside. 9530-9550 is the next resistance zone to watch on upside.”

Understanding sector participation: In the last trading session Nifty consolidated till 1 p.m and post the same prices rallied towards 9530 levels. On net basis there was not much change and prices closed on a positive note with 13 points gain. During the same time, stock specific action has continued in which Tata Steel gained 8%, IB Housing Finance (3%), Tata Motors (2.60%), ICICI Bank (2.25%) respectively. During the uptrend we often witness rotational rally and hence it is better to trade stock specific in the direction of the trend as long as Nifty is sustaining above important support levels. Sector wise outperformance in Metal and Auto was witnessed which closed in the positive territory.

The daily chart of Nifty shows that prices have been intact in blue upward moving channel which is connecting the important lows of 7893 and 9075 level. Few days back Nifty tested this channel support and resumed the uptrend. Hence as long as this channel is protected, it is better not to catch the top. As per wave perspective, prices are in wave …. of Diametric pattern which is subdividing further. Forecasting of wave g is little tricky as it has broken above the black channel resistance and hence as long as pivot lows ……

We have shown Advance/Decline line which was shown few days back as well in this research report. We are again showing this as Nifty is trading at life time highs and the overall breadth has continued to deteriorate. In fact, this AD line is now on verge of crossing below the levels seen in beginning of 2017. This indicates negative divergence between the market and its internal health. Hence one should trade with strict risk management strategy.

(60 mins chart with Elliott/ Neo wave is not shown here which is covered in research report)

As shown in 60 mins chart, prices are trading close to the upward moving channel resistance. The major drawback of this channel is that as and when sideways action happen, it creates further room on upside. Hence it is better to keep an eye on important areas. ….. is the immediate support where black channel support is also placed.

In short, Nifty trend is positive but it is near to the channel resistance so expect some consolidation. …. is the important immediate support for now and avoid catching a top unless ……

The volatility is going to increase in next few days and in this volatility one should not get carried away and following the important reversal area along with pattern is vital. Subscribe to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.

Nifty revisiting crucial 49 days Topping Time cycle, Neutral Triangle pattern!

Bottom Line: Nifty has been fluctuating between alternate days positive and negative closes. Expect sideways action to continue unless crucial levels break!

Nifty daily chart:

Nifty daily chart: 49 days Time cycles

Nifty 60 mins chart:

Wave analysis:

Nifty continued to oscillate between important levels and managed to bounce back on previous day from the important channel support. Participation was seen from underperforming stocks like Axis Bank, Tata Motors which were among top gainers. Nifty had a Gap up opening near 9080 and post that prices traded in a narrow range of 30 points. Majority of sub-indices closed in positive territory. The movement was exactly opposite to that seen on 27^th March. It seems the trend is reversing in every two days.

Time cycle of 49 days: It has been sometime since we visited this Time cycle. We have been following this cycle for many years but it lost its importance for a while during strong trending move of 2014. Nevertheless, post March 2015 this cycle has worked very well for catching important tops irrespective of all the euphoria preceding the fall. Infact, the top made prior to Demonetization was also captured by this cycle. As shown on the second daily chart the important tops as per this cycle is marked on the chart. The high made on 17^th March 2017 at 9218 was exactly on this cycle day and it becomes extremely important to pay some heed to it now. As per this cycle, the high at 9217 might remain protected for few months. Let us see price action over next few days from here on for further confirming validity of this cycle.

Moving average difference Indicator: At times non bounded indicators provide subtle changes or divergences which the bounded indicators like RSI might not able to amplify. We can clearly see that Price Oscillator indicator that measures differences between two Moving averages has formed a lower high when Nifty touched 9218 levels. This is another reason why we think the momentum on upside is reducing. At the same time the channel slope has changed from blue to black thereby further suggesting reduction in the speed as shown on first daily chart.

Neutral Triangle pattern: The overall structure looks like a Neutral Triangle pattern post wave x and currently wave e of the same is ongoing. This wave e is the final leg of up move which should produce series of divergences and result into distribution. Bollinger Bands have now turned flat with upper end of the band lying near 9140 levels. So let us see how far wave e can stretch from here on.

Price confirmation awaited: As Nifty managed to bounce back from short term channel support and protected the lows of 9018 the near term trend will remain positive unless and until we see close below this level. Price confirmation takes precedence over Cycles and Indicators and we will get negative confirmation only on break of 9018 levels. However, when supporting indicators that has worked well in the past starts to get aligned again it is time to stay alert and not complacent like majority who are expecting strong trending moves further from here.

In short, trend for Nifty will be sideways within a range of 9160 and 9020 levels. We can expect minor positivity to continue as long as crucial support near 9020 is protected. However, momentum indicators with Time cycles and Neo wave application is suggesting the uptrend is currently in matured stages and next few days of price action is very crucial!

Subscribe to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.

ICICI Bank: Neo wave Extracting Triangle Pattern and Topping Time cycles!

Identifying the Neo wave pattern and Time cycles to understand the trend of ICICI Bank.

Neo wave is the advanced Elliott wave concept has more than 15 rules which should be followed for impulsive waves. If one of the rules is not met then pattern is simply corrective in nature. Neo wave has introduced a few newer patterns which is not covered in Elliott wave such as Diametric pattern, Neutral Triangle pattern, Extracting Triangle pattern. These all patterns are corrective in nature and have different rules. Below we have shown daily chart of ICICI Bank which shows that second correction is forming Extracting Triangle pattern. Here we can see that downside legs are getting bigger whereas upside legs are smaller in nature. Apart from that there is 70 days Time cycle which is working as topping one from the start of 2016. Below we have shown part of research taken from “The Financial Waves Short Term Update”.   

ICICI Bank daily chart:

 Wave analysis:

“As shown in daily chart of ICICI Bank, since 2016 this stock has continued to move in an upward moving channel. This time prices have failed to reach towards the channel resistance and have started to show weakness. Moreover this reversal has taken place when 70 days Time cycle was due in last week. This cycle has worked as important topping cycle in the past occasions and hence one should not ignore the same. In the current week prices have taken out low of prior week’s lows which will keep bias on negative side. MACD is also moving below signal line which indicates bearishness.

(The internal wave counts is shown on 60 mins chart which is shown in original report)

As shown in 60 mins chart, recently prices have broken the blue channel support and as of now hovering around the same. The fall was sharp in nature which increases the odd that minute wave (e) of minor wave e might have completed. Prices have also formed tilted Head and shoulder pattern which is a reversal pattern and forms during the stage of distribution. On upside ……. is the important resistance.

In short, ICICI Bank is now at important levels. Close below ….followed by break of low of wave (d) near ….will confirm the bearish outlook. Please note breaking of pivot support levels is important in the current market scenario.”

To know in-depth research on Nifty and 3 stocks on daily basis subscribe to “The Financial Waves Short Term Update”

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Nifty Fractal Nature worked brilliantly! What is next?

Understanding the Nifty trend with Fractal nature along with Elliott wave, Channels and RSI!

What is Fractal Nature: Nature exhibits Fractal nature across the universe. This nature is exhibited even by stock markets. Similar patterns are repeated across different degrees of time which is termed as Fractal Nature.

Based on the same concepts we published research on Nifty identifying Fractal nature on 60 mins chart. The part of the same is taken from “The Financial Waves Short Term Update” published on 17^th February 2017.

Nifty 60 mins chart: (Anticipated in the morning of 17^th February 2017)

 Nifty 60 mins chart: (Happened till now)

(Part of research taken from 17^th February 2017)

Wave analysis:

“On Nifty, the pattern seen over past few days look very similar to that seen during the previous wave x formation. This is highlighted on the hourly chart. It is interesting to see how closely both the patterns resemble. The previous wave x formed a low near 8327 on 23^rd January. During this move as well, the fall was sharp but only to form wave x. Failure to see follow-up selling below previous day low the chances of another wave x formed at the lows near 8715 is high. If Fractal nature is into play then we can expect a break on upside like the ones seen in earlier pattern.

For a trader it is not easy to change the stand very quickly. But in this dynamic environment when markets are moving very fast it is best to adapt to the new price information as quickly as possible. In case Nifty manages to decisively break above 8825 resistance zone we can expect sudden spurt on upside due to short squeeze and fresh long build up.”

Nifty gave a positive breakout as expected and prices moved from the levels of 8760-8770 to recent highs of 8980 based on Fractal nature. In the current market trailing stop method is the ideal strategy to capitalize the trend as long as it goes!

To know the Elliott wave pattern along with important levels on Nifty and 3 stocks, subscribe to “The Financial Waves Short Term Update” and selecting the Equity research report Services

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