Infosys Elliott wave analysis and Results.....

Infosys result weighs on the Indian markets but Bloomberg suggests profits beat analysts’ estimates!

Below is the chart of Infosys after the results were announced. Write to us on helpdesk@wavescapital.com to get complete elliott wave analysis and what we expect from IT industry as a whole. Few wave labels and path ahead for Infy have been purposely deleted from the below chart: 

Infosys Daily chart 

Infosys declared better than estimated profits as per Bloomberg but still this stock was down more than 8% in single day just based on future guidance. This is a very big fall for IT bellwether but is no surprise to us. For IT, we mentioned before on 27th December 2011 that “It is quite sometime since we covered IT bellwether TCS and Infosys. The above chart (shown on 27th December) is a Daily representation of TCS prices and it clearly indicates why we are refraining in providing any views on this stock. Prices have been moving up in overlapping formation with random movements within the channel. We also mentioned entire rally as corrective and so looking for selling opportunities”

This clearly put forwards the point what happens when wave structure suggests weakness but prices move up in overlapping formation. We believe that events do not drive stock market and can lead to only short term movements or spikes but it is the basic social mood and perception of the crowd that moves the stocks. Infosys movement after results clearly conforms to this belief.

To see what is path ahead for Infosys subscribe to our daily research publication of Indian equity markets - Short term Financial Edge. Write to us on helpdesk@wavescapital.com for more information.

Waves Strategy Advisors: New Product Launched: Nifty Trading Strategy Report

Waves Strategy (www.wavesstrategy.com):

We have launched a new product that does not show the complex technical analysis and Elliott wave analysis shown in our daily Financial Edge report. Our new report Financial Edge Trading Update will have only Nifty and is ideal for traders who would like to know trade setup for the day and are not much interested in wave structure and stocks. This new report is also published everyday morning before 8.30 am and clearly mentions the levels where trades can be initiated what can be the trading strategy for the day.

Please mail us across on helpdesk@wavesstrategy.com for more information or to see the sample report.

Nifty continues to pass cycle lows by moving sideways!

Nifty Daily chart

Nifty 60 mins chart

Nifty is not doing anything but just buying time maybe to pass out cycle lows. During start of the year itself we mentioned 16th Jan as the cycle low date and Nifty is probably moving closer to this date before breaking out.

On daily chart, we have shown 2 standard deviation line. This indicator suggests how much prices are deviating from the moving average over a period of 14 days. This indicator is now very close to the support level from where it has bounced back many times. This does not indicate direction but does indicate a strong directional move is expected soon as prices should again start deviating from their mean levels.

60 minutes chart is showing Nifty’s sideways action at its best. Nifty has been testing patience for directional players and is moving in a trendless fashion. We continue to maintain our stand that a close above 4800 will give a strong positive breakout & we can move towards 5100 levels but a move below 4685 will indicate further weakness ahead till 4600 levels.

Waves Capital: Nifty anticipated & Happened! AGAIN!!!

Waves Capital (http://www.wavescapital.com/): The below chart was published on 30th December morning 8.30 am in Financial Edge short term update (Daily research publication) that showed the possibility of triangle formation and the crucial support and resistance levels which holds true even as on date.

Nifty 60 mins chart

Nifty as on 4th December 2012

The above chart itself explains how well the levels have been respected and even the triangle pattern that we showed as a probable scenario between two converging lines has been respected even today. Please write to us on helpdesk@wavescapital.com if you would like to subscribe and be a part of this objective analysis and reduce emotional stress!

Nifty path ahead 2012:

Nifty Weekly: Path Behind 2011

Nifty Path Ahead: 2012

2011 Snapshot:

Nifty weekly chart shows what we left behind in 2011. The entire move down is well channeled in 2011 and complex. The year was one of the most difficult year maybe in a decade because of overlapping complex pattern formation. There was no clear trend in either direction. 2003 – 2008 had a good up-trending phase. 2008 had good downward phase where Indian markets moved down steeply. 2009 – 2010 again showed up-trending moves with election gap (circuit up) during mid of 2009.

2011 however did not produce big trending moves but intermittent minor trends. First chart shows 20 Blue bars (Weekly closing up) and 31 Red bars (weekly closing down). This statistics is itself sufficient to convey how Nifty index has moved. But please understand the stocks and sectors behaved very differently during the same period. Sectors like Banking, Real Estate, Capital Goods, Metals performed very poorly whereas sectors like IT, Healthcare, FMCG outperformed. The market as a whole was completely divided.

2012 PATH AHEAD:

The second chart clearly shows what we are expecting in 2012. 69 days Time cycles that we have been showing since past 6 to 9 months is bottoming out around 16th Jan (+ 8 days). The prevailing sentiment is extremely bearish, which is contrarian indicator for us. A break of previous low at 4531 will turn even the remaining few bulls into bears and that is exactly where Nifty should bottom out for medium term.

Wave pattern forming is an ending diagonal (Wedge) and it satisfies the most important requirement of loosing momentum as can be seen from both weekly and daily chart where RSI is constantly forming higher bottoms. We are currently in wave e of this pattern or wave d is still ongoing. Either ways it will be sideways to lower drifting market with no strong direction over next week. An end of terminal pattern result in euphoric rise that retraces the complete previous down pattern in less than half the time and sometimes in just a fourth of the time. A move up as shown on chart will be surprise to many but not to our readers.

A new uptrend euphoria will then be created by Nifty breaking above crucial resistance levels as shown and a new bull market has started in 2012 will be the talk of the town. Nifty can move high to as much as 5600 – 5800 levels. However we would be looking out for shorting opportunity then during mid to end of March (as per 32 weeks cycle founded by Vivek Patil) that fits exactly in sync with our 69 days Nifty / Sensex cycles.

Also each of the leg of ending diagonal till wave c has taken approximately 9 days and so wave d and e combined should take around 18 days to complete this pattern. We have already completed 8 days and has 10 to 11 more working days to complete. This again gives us a date of 16th January 2012 which is exactly in sync with our 69 days cycle bottoming on 17th January 2012.

USDINR is also forming an Ending diagonal pattern on upside – a wedge like structure. Bank Nifty index is showing similar formation and losing momentum on downside. This conforms to our pattern analysis on Nifty.

On completion of top around 5700 we can start a steep fall that will be a good trending move again but on the downside.

In short, 2012 shall be a good trending year opposite of what 2011 was and hopefully a year less complex and with better tradable opportunities!

Adieu 2011 and Welcome 2012…