How to Trade using different technical analysis techniques?

Technical analysis is a vast field having varieties of techniques and indicators. 

Many people look at technical analysis as simply drawing trendlines or channels and just using a few patterns or indicators.

Elliott wave is advanced concept of technical analysis which provides holistic approach to the entire application and that encompasses basic patterns like Head & Shoulder, Triangles, Wedge, etc and also an indicator like RSI, ROC, MACD makes a lot more sense when looked along with price wave counts. For example: Wave 5 and wave 3 normally shows negative divergence meaning prices make new highs but indicators make lower highs. Basic technical analysis indicator suggest that the upside momentum is reducing but when we apply Elliott wave counts along with this indicator it also gives us the path prices will follow. By only applying indicator does not give us strong forecasting ability but combining with wave theory and Fibonacci ratios provides probable future path the stock or index should follow.

The below chart is of Nifty during 5 waves up move with classical negative divergence and Wedge pattern formation as on 31^st January 2013:

Nifty daily chart: (data 31^st Jan 2013)

 Movement as of 20^th May 2013:

After completion of 5 wave on upside prices correct in 3 waves structure. Also wave 5 and wave 3 above shows classical negative divergence i.e. prices made new highs but RSI made lower highs indicating upside momentum has been reducing.

The above example simply shows how Elliott wave and Fibonacci ratios can help to forecast future price direction which only using indicator, channels and other basic techniques might lack. At the same time basic techniques are also the core of Elliott wave principle and have to be used to derive high conviction trade setups.

Many might claim that identifying trades or looking at markets in hindsight is simple but forecasting the future is always challenging. But we have done that before at the top of January 2013 and again in January 2014. We do it every time majority of indicators and Elliott wave counts gets in sync and do not hesitate to forecast against the majority of crowd. You can see the article we published on 11^th January 2013 - Nifty path ahead and an upcoming Tsunami! The above charts are not random but picked up from the actual research reports we publish on daily basis.

To know what is next from here and get the latest forecast on Indian equity markets along with stocks you can subscribe to “The Financial Waves short term update” and see where we think Nifty and majority of stocks are headed from here. Learn yourself on how to combine various basic techniques and advanced technical analysis – Elliott wave together.

To subscribe to our Equity Research Report visit http://wavesstrategy.com/index.php/store.html

Ashish Kyal,CMT is conducting 2 days training workshop of Advanced Elliott wave in Mumbai on 1^st and 2^nd March 2014 at Hotel Grand Sarovar Premiere.

To get more details for the training visit http://wavesstrategy.com/index.php/free-articles/trading-lessonsa-education/743-training-on-neo-wave-advanced-elliott-wave.html

Training on Neo Wave - Advanced Elliott Wave, Identify best trade setups with practical examples

Neo wave is an advanced part of Elliott wave and is coined by Mr. Glen Neely. In simple Elliott wave there are only 3 basic rules. However by using only 3 rules for impulsive structure there are couple of probable scenarios always running. 

Neo wave has many rules to define a simple impulse pattern which are very rare. This tends to reduce the subjectivity and provide objectively the most probable scenario that can occur.                                        

Does any one of the following happen to you?

• You buy stock on the basis of good news or better than expected result and price of the stock still keeps falling after you take the long position?
• Why does market moves in your favor but only after hitting your stoploss?
• You are always out of the market during best of the trends!

If your answer to any one of the above question is YES, then you belong among 80% of crowd that faces similar situations every day. One of the most common requests we get from subscribers is that can you teach me how to look at a chart and find opportunities for myself? Our Trading course on Neo Wave - Advanced Elliott wave will teach you how to identify and trade those opportunities.

Whether you are an Intraday or Positional trader or want to invest in stocks, commodities or forex, futures or options – you get a practical trading education that you can apply immediately. It is plausible to forecast freely traded markets with high accuracy but provided you have the understanding of necessary technical tools.

About Speaker:
Course conducted by Ashish Kyal - Ashish Kyal is a Chartered Market Technician (CMT)– Degree provided by Market Technicians Association (MTA – USA). He writes for MTA newsletters and is a frequent speaker on business channels like Zee Business, CNBC TV18. He is a regular columnist for Economic Times section of Navbharat Times, a leading newspaper in India. He has been interviewed by Swiss Business Channel on Indian Economy. Ashish carries vast experience of analyzing World Equity and Commodity markets using techniques like Elliott Waves, Time Cycles, and momentum tools. He frequently speaks at financial seminars like Financial Technology, Market Technicians Association (MTA - USA) Association of Technical Market Analysts (ATMA)

Where and when is the course?
The training is at Hotel Grand Sarovar Premiere, Goregoan, Mumbai on 01^st-02^nd March 2014. This belongs to 5 star category having chain of international hotels and the fees is including Tea / Coffee and Lunch.

Registration Fee: 
The charges for the Training is Rs. 10000 + 12.36% Service tax =Rs.11240/- (Till 31st January 2014). 

If enrolled after 31st January 2014 the charges will be Rs.13490/-

Existing subscribers to any of our research products can avail a discount of 10%

Registration is on first come first basis as there are limited seats.

How to Enroll?
To register for the training using either Credit Card or Net banking visit http://wavesstrategy.com/payment/ and mention Product as “Neo Wave Training” and period as “1”.
OR
Fill in details at http://wavesstrategy.com/index.php/contact-us.html and we will get in touch with you.
OR
Write to us at  helpdesk@wavesstrategy.com /call us at +91 9920422202 /+91 22 28831358

Nifty Elliott wave predicting patterns and trading strategy!

Nifty has been moving precisely as per the Elliott wave pattern. The below chart shows the double corrective pattern and the short term path it should follow (Blue line).

The below chart was published on 5^th February morning.

Nifty 60 mins chart: (as shown on 5^th February morning)

Happened today as of 11 am

Nifty has moved to the point as expected. Prices are moving in double corrective Elliott wave pattern and as mentioned earlier there are times when patterns are very clear and predictability is high and at complex corrections it can be low. Currently after 3 months of low predictability Indian markets have been forming known patterns.

In addition we also give Nifty trading strategy in “The Financial Wave trading update”. Today’s morning strategy was “For today, short positions can be created on move below 5995 with 6220 as stoploss and target of 5965. Long positions can be created if Nifty moves above 6050 with day's low as stoploss and target of 6090.”

Happened: Nifty made a high of 6048.35, broke 5995 and almost achieved target of 5965. The exact low is 5966 so far!

To know what is next after the completion of wave c of 2^nd correction subscribe to “The Financial Wave Trading update” giving Nifty trading strategy during the day. Prices have now arrived near crucial levels again. 5970 has lost its significance as expected.  Visit http://www.wavesstrategy.com/index.php/store.html and subscribe now to the Nifty or Equity report and see yourself the short to medium term trend for Indian markets.

Elliott wave: Nifty moved below 5970 but reversed exactly as expected! Trend is still negative!

The below research is picked up from "The Financial Waves short term update" and was published today morning before equity markets opened. We did mention that a break of 5970 will turn many bearish exactly at wrong time! To subscribe this daily research report visit http://wavesstrategy.com/index.php/store.html

Bottom Line: Nifty continued to move lower and is approaching towards 5970 level which should be momentarily broken to trap fresh shorts at lower levels!

Nifty daily chart:

Nifty 60 mins chart:

Wave Analysis:

In previous update we mentioned that, “In a nutshell, short term consolidation cannot be ruled out but is not necessary. Move below 6040 will resume the downtrend and prices can travel towards 5970 levels which is crucial level on downside whereas any move above 6110 can lead to minor bounce back. On upside 6170 level can be utilized as trailing stop.”

Nifty had another Gap down opening of around 30 points and prices continued to drift lower throughout the day making a low of 5995. Yesterday’s fall was different from the previous ones in a way it was more of a steady decline and very less intraday volatility. Such systematic fall cannot mark an end to short term trend and before reversal we should see the struggling between bulls and bears. Looking at the individual stocks there is positive divergences but if the fall continues from here these divergences will not carry any value. We also think prices might break 5970 level this time atleast momentarily which might be a trap for traders initiating fresh shorts at lower levels based on break of important support. Nevertheless the trend is down with 6097 as important resistance level on upside.

As shown on 60 mins chart, prices are moving in a red downward sloping channel. We are showing one of the possible wave counts as corrective on downside with a-b-c-x-a-b-c and prices are currently in wave a of the 2^nd corrective pattern. 5950 level on downside is where wave a will be equal to 61.8% of prior minor wave a. Break below 5950 will extend this wave a further on downside.

The high beta sectors showed minor bounce back on Friday but it was only short lived as expected and both Midcap and Smallcap sector again closed negative. Existing short positions from 6280 highs can now trail stop towards 6097 which is very important level on upside.

In short, our bias will be negative unless we see a move above 6097 level and we doubt if 5970 will provide any support this time. If a Gap down opening is closed instantly with sharp reversal on upside that will be first sign of reversal but unless that happen ride the trend as long as it lasts rather than catching a bottom!

Subscribe now to "The Financial Waves short term update" that shows Elliott wave counts along with other technical studies and 3 other stocks. In last week's report itself we mentioned that 5970 level will be broken this time. To know what is next from here after the 5th Gap is filled subscribe by visiting http://wavesstrategy.com/index.php/store.html and select "The financial Waves stu" The report will be sent on daily basis on the email id and can also be accessed under Client login section of website.

Why is Equity market falling? By Ashish Kyal in Economic Times section of Navbharat Times!

Pressure on Indian equities can continue for few more weeks!

The below is the English transcript of article by Ashish Kyal, CMT Director of Waves Strategy Advisors in Economic Times section of Navbharat Times.

For daily research reports or advisory visit www.wavesstrategy.com

In the previous week sharp sell off was seen in Indian Equity market and major index Sensex closed on negative note by more than 3% compared to previous week’s close. Weekly and monthly closes provide important information about the overall trend of the market. Previous week, Monday started with a strong Gap down opening on Sensex and the selling pressure continued till Thursday. It formed not only bearish weekly bar but bearish monthly bar as well.  More importantly, prices have closed below the December month’s low. This negative bar on monthly chart was last seen in August 2013. This has turned the monthly as well as weekly trend from sideways to negative. Also this strong selloff was in lines with our technical studies that showed lack of momentum and strength on upside and more number of stocks moving down even if index was near new highs.

NSE Advance decline line is a simple technical indicator which shows the overall breadth of the market. Even when Sensex was near 21400 levels this indicator was moving lower indicating more number of stocks were closing negative as compared to advancing stocks. This is known as negative divergence and it warned about weak upside momentum.

World Markets:In the previous month, DJIA showed a fall of more than 950 whole points from the lifetime high of 16585. Along with this other developed markets like FTSE (UK), DAX (Germany) and CAC (France) deteriorated by more than 6%. India was already underperforming and the selloff in developed and other emerging markets should put more pressure on Indian markets.

Banking index under pressure: In the start of January Sensex made high of 21330 whereas Banking index failed to move above the previous high of 12000 which was formed in the month of December 2013 and moved lower sharply. PSU banks like SBI, PNB, IDBI, had seen strong selling pressure in previous week. RBI governor Mr .Raghuram Rajan surprised most of the economists with repo rate hike by 25 bps to 8%. This did not help banking stocks which were already under strong pressure. As long as 11000 is intact on upside in Bank Nifty, this sector can continue to be in downtrend.

Week ahead:Taking into account the perfect sync of developed and developing markets, declining advance decline ratio, weakness in broader market, negative weekly and monthly close we think Sensex short term top is in place. This week we can expect sideways to negative action to continue. On upside 20900 should act as strong resistance which was previous support (polarity reversal) and on downside 20150 is very important support level from where Sensex has bounced back twice in November 2013. During downtrend volatility can be high, so trade cautiously and systematically!

Subscribe to daily research report with Nifty Elliott wave counts and other technical studies by visiting www.wavesstrategy.com