Nifty: Power of Fibonacci and pattern! BANG ON!

Nifty showed a move of more than 140 points in today’s session on the upside. This might be a shocker for the shorts but we have been mentioning the importance of a channel that has worked out brilliantly in the past on more than 4 occasions.

Below is the hourly chart of Nifty that was published today morning before equity markets opened. We mentioned the important support zone near 9950 levels which was also 61.8% projection of the wave a on downside.

Latest webinar: Will Nifty form a low or will it crash?

Nifty 60 mins chart (showed on morning of 26th March before markets opened)

Happened:

Wave analysis:

Following was mentioned in morning research – The Financial Waves short term update

…The overall selling pressure seen now is due to the weak Global markets. US major index DJIA is down another 424 points. This can result into weak opening but closing is going to be crucial.

It is not only Nifty but many individual stocks are also arriving near the lower trendline support. It is rare to see lower trendline getting broken on downside and when that happens real panic kicks in. So it is very important for bulls to protect the lower trendline support on closing basis… As shown on hourly chart, prices are moving lower in the form of minute wave c of minor wave g of Diametric pattern. Friday’s low near 9950 is also where wave g = 61.8% * wave a. So today’s closing is important.

Existing shorts should book partial profits as prices are approaching cluster of support zone and trail remaining to ride the ongoing down move but with a strict stoploss in case there is a sudden reversal.

…We have seen break below all the major supports so far but this is the level near lower trendline from where we have seen bounce back on more than 4 occasions in recent past. Let us see if it works again this time or not!

 Happened: Nifty moved precisely as expected and prices reversed back from the important Fibonacci projection and trendline support. This simply shows power of Elliott wave, Neo wave, Channels and Fibonacci.

In case you missed my latest webinar where I talked about me turning bearish near 11000 levels and now turning bullish near 10000 mark! Here you can watch it – Elliott wave channel.

Subscribe now to “The Financial Waves short term update” and see yourself how to trade from here on Nifty, Stocks, Bank Nifty and why we were cautioning the shorts when majority turned bearish below 10000 levels. Also we have been able to provide long calls on Nifty, Bank Nifty, stocks to our subscribers right at the bottom when only a few would have dared about it! Get access to Intraday / Positional advisory and get research reports free along with it. Subscribe here

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: Combination of Elliott wave, Time Cycles, Trendlines, Channels, MACD!

Technical analysis applied on stocks – ICICI Bank. The below research shows application of Elliott wave, Time cycles, Channels and MACD.

Stock market exhibits the cyclical nature and to understand the same we apply different Time cycles to know if important top or low is in place or not. As per Hurst’s Time cycles, capturing the low can be easier than top as distribution process takes time and hence validity of cycles can be in question.

Nevertheless we follow normal cycles also which works well on particular stock or index. Below we have shown example of ICICI Bank which is taken from “The Financial Waves Short Term Update” which was published in today’s morning report. Here we have shown 69 days Time cycles which is working as topping cycle since April 2016.

Isn’t it interesting to see that how precisely this stock is following time cycles?  

ICICI Bank daily chart:

(Part of research published today morning)

Wave analysis:

“Stocks like Axis Bank and ICICI Bank has been moving in non trending environment from last few days. Looking at the short term structure of these stocks and failure of Bank Nifty to generate the upside momentum, there is high probability that distribution might be under process. However it is better to wait for price confirmation which will guide the trend ahead.

As shown in daily chart ICICI Bank, it has been trading in expanding structure since April 2016 and from last few days prices are moving in the range as it has tested the important trendline resistance. Along with this, Time cycle of 69 days which has formed crucial tops and this time also cycle looks to have worked well as prices have not taken out resistance area. MACD is already showing negativity as it has given sell signal. Now break below pivot low will confirm that downside trend has started.

(60 mins chart is not shown here which shows internal wave structure)

As shown in 60 mins chart, prices have till now completed double correction pattern and post that some pressure has been witnessed in last few sessions. The current downfall has broken the channel support and move below …… will indicate that retracement on downside in form of minor wave … of third standard correction has started.

In short, ………….

Elliott wave, Time Cycles and other basic technical concepts can help traders to form trading strategies with prudent risk reward ratio. Get your copy of “The Financial Waves Short Term Update” which covers in-depth research on Nifty and 3 stocks on daily basis.

Most Advanced Technical analysis training EVER – Nifty has arrived at important juncture and despite majority turned bullish prices have not headed anywhere over past two weeks. This looks like a classical case of distribution. During such times it is prudent to learn the methods and indicators that help us to time the turn and capture the trend when it is just starting. Learn Elliott – Neo wave combined with Hurst’s time cycles and Gann analysis. I will be discussing various methods I personally follow to derive at trading decisions. Training is scheduled on 29th – 30th July 2017. Know More

Tata Motors inverse Head & Shoulder pattern and Elliott wave counts!

Below article gives detailed technical analysis on Tata Motors with concepts like Channels, Trendline, Elliott wave, Pattern.

Indian Equity markets have been able to digest the negative news so far especially when it is on back of a Global event. BREXIT, US Trump outcome, FED rate hike all of these events resulted only into a temporary move on downside and prices recovered back sharply on same or next day. This clearly highlights the fact that news or events do not drive the markets but only produces short term volatility or random moves. The original trend eventually resumes and it is therefore important to understand the objective techniques like Elliott wave, Time cycles, crucial support and resistance levels.

Let us look at how a few of these methods can be applied on stocks like Tata Motors. The below chart is picked up from our daily research report “The Financial Waves short term update”

Tata Motors 60 mins chart:

Wave analysis: (below research is from report published on 14^th December 2016)

Despite of Tata Group being in news in the recent days, Tata Motors managed to close at the second position in the top gainers list. The reason can be contributed to the buying of Tata Motors near 486 levels by Tata Sons but as per the chart itself we were seeing accumulation pattern over past few weeks.

Now looking at the daily chart of Tata Motors (shown in actual research report), minor wave a is complete and now wave b of (X) has started on upside. This wave b can retrace towards …… levels which is also the Gap area created on back of the news or event few weeks back.

On 60 mins chart we can see that, post breaching the red channel support prices failed to move lower and completed minor wave a at the lows of 430 levels. Currently retracement of the previous down leg is ongoing in the form of minor wave b. Prices have now re-entered the channel. Another important thing to notice is that this stock has formed an inverse Head & Shoulder pattern and just managed to break the neckline which adds on to near term positivity.

In short for Tata Motors, near term trend will be positive as far as the recent low of 450 levels is intact. On upside, prices should continue to rally towards …… levels which is the head target and also the 61.8% retracement zone.

Subscribe NOW to “The Financial Waves short term update” to see crucial turning juncture and how to trade Nifty, Bank Nifty, stocks amidst all the negative news using important support and resistance levels. Simply visit Pricing page and select equity research report. Also subscribe annually and get Flat 30% discount with Free Global research report!

Video update: How to trade Nifty using Trendlines and Indicators?

The above video explains outlook on Nifty using Bollinger Bands(r) parallel trendline concepts and other key reversal support and resistance areas.

#ElliottWave news channel is a short video series. Ashish Kyal of http://www.wavesstrategy.com/  will be going live weekly at 4 pm every Friday. Stay tuned to know the current technical state of markets and learn more on advanced concepts of Elliott wave, #Neowave and #TimeCycles.

Nifty flirting around 8000 levels! Applying parallel trendline concept and Elliott wave!

Below research is picked up from "The Financial Waves short term update" by Waves Strategy Advisors - www.wavesstrategy.com To subscribe to daily research report visit the website.

Nifty daily chart:

Nifty 60 mins chart:

Wave analysis:

In the previous update we mentioned that, “In short, Nifty continues to drift lower in last session. It is only on move above 8150 followed by 8210 will suggest positivity however any break of 8030-8000 zone will lead to panic selling”

Nifty opened near 8100 levels but only to enter into red territory immediately. Selling pressure continued to build up throughout the day and majority of stocks along with high beta Midcap and Smallcap sectors ended in deep red territory. It is prudent to avoid catching a low in such market unless and until we see decisive close above the previous day high.

Nifty has now broken the psychological level of 8000 as well. This time the fall has happened after breaking the downward sloping channel on downside which was also on back of the event on 9^th November. On the same day there was sharp positive retracement and Nifty touched 8600 the next day on 10^th. Post that the strong selling pressure started building up. Such high volatile swings result into tricky trading environment which we are witnessing now, especially when the global markets are stable and US markets have been touching new life time highs. It is not very often to see such wide divergence between Indian equities compared to global markets. Nevertheless, during such scenarios one needs to wait for close above previous day’s high for some indication that there is a pause or atleast temporary halt in the selling pressure. In the entire down leg from 8600 there is not a single close above the previous day’s high.

We are showing parallel red channels on the daily chart which has provided support during the spike low of 8002 on 9^th November. The problem is there is no major downward sloping channel and so we need to make use of parallel trendlines to identify the important support zone. 7925 was also the level created on the day of BREXIT event. Such spike lows are important and if Nifty continues to move below 7900 then the next parallel trendline support near 7600 will open up.

As shown on hourly chart, the fall from 8600 looks to be in double corrective pattern with wave a of second correction currently ongoing. During this entire trend 15 period Exponential Moving average has worked very well as resistance and we have not seen decisive hourly close above this average all the while. Also for any positivity we need to see break above the red trendline along with faster retracement above 8105. Unless that happens the short term trend will remain negative.

In short, trend for Nifty is negative as prices have closed below psychological level of 8000. Further negative close below 7900 will open up more downside possibilities. Immediate move above 8000 is required to hint towards atleast a pause in the downtrend with 8105 as important resistance on upside.

For daily update along with detailed Elliott wave counts on Nifty, Bank Nifty, Stocks, “The Financial Waves short term update” with short to medium term outlook and key reversal areas. For more details visit Pricing Page.

Sensex - Is the up move a fool’s rally?

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In today’s morning equity report “The Financial Wave short term update” we published the following in addition to in depth analysis using momentum indicators, Elliott wave counts, etc-

We have been expecting start of next Bull trend in 2014 and has highlighted it in all of 2013 but looking at the short Elliott wave patterns and structure we have our doubts if this can be it and one final leg on downside is pending before the Bull run can start. The up move from 5980 has been corrected everytime by mere 1 day of fall which is a typical characteristic of a corrective pattern where corrections take lesser time than preceding waves. Also last 100 points of up move on Nifty has already created lot of euphoria by moving a few selective stocks up by anywhere between 5% to 8%. Bull Trend does not start with lot of euphoric rise but should be more subtle and in disguise and accompanied by strong accumulation which should be reflected in volumes which is not visible so far.

The following is published in this month’s issue of “The Financial Waves Monthly update” which forecasts medium to long term trends on Sensex, Gold, Forex, BITCOINS, and lot more in its 16 pages of comprehensive report.

Sensex weekly chart is showing a very important channel which is working since 2010 onwards. The lower trendline of this channel has provided strong resistance to prices everytime index has approached near it. We can clearly see that since 2013 onwards prices are simply clinging to thistrendline and drifting higher. As long as prices do not enter in between the channel shown above the move can remain subdued and slow.

Figure 2: Sensex weekly chart

There are times when the wave structure become very complex and we have to combine it with other techniques like Time cycle, Breadth indicators, Moving average differences, etc.

Price Oscillator indicator: We are showing a Price oscillator indicator on the weekly chart. This simple Oscillator takes difference of 2 Moving averages and plots it. We think difference of Moving average provides much vial information than the single average itself. The reason being difference of average is a true indication of momentum. It measures market momentum over short term as compared to medium or long term. In the above chart we are using 20 days and 5 days Exponential Moving average. The indicator clearly reflects that momentum has been actually slowing down since October 2012. The high hit in October 2012 by the indicator is still not taken out and each of the high is on lower value. This means that the shorter moving average is not able to move away from longer Moving average giving which cannot start a strong trend on upside. Even currently the indicator is lying near value of 1 when the index is reaching near another high.

………………………………

In a nutshell, …………….. The probable turning point for this move is near ……… levels and the reason why we are changing this value is based on the fact that the resistance trendlineconnecting the tops is slightly tilted on upside and with each passing month the resistance is slowly shifting upwards. A very strong ……….

Subscribe now to “The Financial waves short term update” and “The Financial Waves monthlyupdate” to view right from 60 mins, daily, weekly, monthly, charts with synchronized Elliott wave count, Time cycles, Breadth indicators, momentum, Price oscillator, RSI and much more to derive the short to long term view on Indian markets. For subscription options visit http://www.wavesstrategy.com/index.php/store.html

Application of Trendlines and Channels on Nifty!

The below research is published by Waves Strategy Advisors. For more details visit www.wavesstrategy.com

Trendlines and Channels are the most basic aspect or studies of technical analysis.

These are the first thing a technical analyst learns but slowly this simple technique takes a back seat as the complexity of study increases. I believe that each of the technique has its own value and trendlines are the integral part of the study which cannot be left behind even if one learns advanced concepts like Elliott wave, Fibonacci projections or Cycle theory.

The below weekly chart of Nifty clearly shows one of the most important channels that has been working for many years now.

We published this chart in today’s morning equity report “The Financial Waves short term update” that combines this technique along with Elliott wave for high probable path market can take. A brief outline of the study and combination is given below:

Nifty Weekly chart:

Importance of Trendlines and Channels:

We have been looking at long term trendlines and channels to understand the crucial support and resistance levels. The weekly chart shown above is giving a very clear picture. Prices are taking very strong resistance near the center trendline which is valid since 2009 onwards. It is for consecutive 6 times the center trendline acted as resistance and prior it acted as support on almost 5 occasions. As per Elliott wave perspective, one push on upside is pending and we are pretty sure the same trendline will again act as very strong resistance which is now near ………. levels. Any strong move above ……….. is required to change the price band towards upper half. This chart reflects the magic of trendlines and channels which has been working precisely since 2008 – 2009 onwards.

In short, 6110 – 6140 is the support zone and ………….

When Elliott wave counts are applied along with the above technique it forms a very powerful forecasting tool!

To know how we are applying various different technical analysis techniques together not only on major indices but also on individual stocks you have to simply subscribe to “The Financial Waves short term update” by visiting Pricing page and you will get the research report on daily basis in your mailbox. In case of any queries for understanding the report you can always contact our research analysts.