Tatasteel: Is multi-month low in place for commodity stocks?

Commodity and Energy stocks have been one of the worst performers post 2008 crisis. Tatasteel also had been a strong underperformer and few months back it came close to the low formed in 2008. But is this underperformance near completion?

A trader or investor should be open to the fact that news do not drive the prices higher of lower. But people tend to find logical news fitting the puzzle post the move has happened.

Tata Steel also showed strong recovery after flirting around 200 mark as the trend was due to reverse. Look at the below chart:

Tata Steel daily chart:

Wave analysis: The below research is picked up from “The Financial Waves short term update”

There was positive news for the steel sector today - India has extended safeguard import taxes on some steel products until March 2018, a government order said on Wednesday, as it looks to curb imports of cheap Chinese steel and shield domestic mills.

It seems logical to justify the up move in metal stock after the positive news. However, Metal stocks like Tata steel has been already in uptrend for many weeks even before this news came out.

The daily chart shows that prices have competed Triple standard correction pattern at the low of 210 level in the month of February 2016 and post that we are witnessing impulsive rise in this stock which is the bullish sign. It is very rare to see impulsive rise in Metal stock as few months back this sector was the most underperforming one. This increases the odd that medium term trend may be reversing on upside. We will obtain medium term positive confirmation in Tata Steel once prices move above …… level. For now as long as prices sustains above the important support of ………. level trend will be positive.

By combining Advanced Technical Analysis on Equity stocks it is possible to understand and trade in that direction with key risk reward ratio.

“The Financial Waves short term update” is a daily Equity research report published everyday morning before equity market opens that shows detailed Elliott wave counts and patterns on Nifty and stocks that can assist a trader in making trading decisions. Subscribe directly by visiting Pricing Page and selecting the product.

Nifty moving in “No Trading Zone”…Is it an impulse pattern or only corrective rise?

Nifty has been all over the places over past few days and a few stocks from Metal, Pharma and Realty space showed sharp decline after a strong rise. This has created an environment of confusion with lack of clarity whether the uptrend that started from 6825 is still intact or the same is over.

By using Advanced Elliott wave principle – Neo wave we can apply the rules to first understand the pattern under formation. The first stage of bifurcation will be whether it is an Impulsive pattern or Corrective pattern? Now look at the below chart and try to see if in the entire up move you can count 5 waves which will suggest the ongoing pattern is impulsive in nature with all the rules being applied.

Impulsive rise? Given the steepness of correction and the overlap of the down move from 7750 to 7580 this indicates that the rise is only in 3 waves and not 5 which is the minimum basic requirement of an impulse pattern. So now we cannot expect wonders to happen on the upside given this basic fact. Let us now proceed to identify which corrective pattern is under formation

Corrective pattern – Zigzag pattern has 3 waves with wave b should take more time than the preceding impulse pattern as per Neo wave principle. Now we can see this in the above chart where wave b has taken more time marked between the first two arrows. To get a confirmation that the pattern under consideration is over we require faster retracement below the last rising segment as per the 2 stage confirmation technique. Looking at the above chart we can see that so far the fall has not fully retraced the rise in form of wave c from 7400 and so the fall can be either wave x or some other pattern is forming. This now raise the odds that wave c is either not complete and forming Ending diagonal pattern or the entire pattern is developing into Extracting Triangle. 

Confused? This is exactly what markets are doing as there is no confirmation. The recent fall has opened up number of possible scenarios and it is only on faster move above 7750 or below 7400, clear trend confirmation will be obtained. At times one has to wait for clear directional signals rather than jumping at every move. This is one such time!

Our clients have been able to capture the most of the trend and it is now time to relish what is made rather than giving back everything during times of confusion when the pattern under formation is not clear. You can now see the pattern under formation on daily basis in our flagship product “The Financial Waves Short term update”. To subscribe visit the Pricing page.

Nifty: Moving Average difference indicator to identify change in BIGGER TREND!

How to use Moving Average difference indicator to identify that the existing trend has reversed?

Below article focused on application of indicators and what does it indicate from medium to long term perspective -

Nifty had another positive close yesterday after a small correction on intraday basis. Majority of stocks continued to move higher and a few stocks like DLF, TataSteel, SBI looks like giving a strong positive break after brief consolidation. As mentioned in earlier updates one should avoid catching a top in current market and surprises will be on upside.

Nifty daily chart:

Following explains why this time the uptrend is different than that seen previously during the fall of 2015. As shown in first daily chart, the momentum so far is strong and rise of such magnitude without any meaningful retracement was not seen during the entire period of down trend that started in March 2015.

Difference of Moving average:The difference of Moving average indicator shown below the price chart has managed to decisively cross above the resistance blue line thereby indicating that the momentum is much stronger this time compared to the previous rise. Also there is still room on upside as the extreme reading seen just before the downtrend started was 270 and the difference of average currently is at 168.

Volumes:Volumes have continued to stay above normal during the entire period of 2016 and Nifty is now at the level seen in December 2015. This above average volume indicates buying interest and accumulation which increases the odds that there can be a positive breakout …………

From wave perspective we are still keeping the possibility open that the current up leg is either wave ……. or wave ………..

“The Financial Waves short term update”is our flagship product that covers detailed technical analysis along with charts and explanation using Elliott wave, Time cycles, combination of indicators. We have been accurate in capturing a top near 9119 in 2015 and now the bottom near 7000 made in February 2016 end. Staying against the crowd when it is most required is possible only by using the objective techniques that we keep publishing in the daily research report. For subscription options visit Pricing Page.

Nifty surged by more than 12% in current month! What to expect next?

The month of March 2016 has been going good for Indian Equity Markets. Post budget i.e from 1^st March 2016 Nifty started to rally and touched 7660 level in quick time. We are able to capture the sharp up move from 7100. Part of the research that was published in “The Financial Waves Short Term Update” is shown below:

March 01, 2016 Time: 10 am

Interim Update: Nifty has shown a very big Gap up opening and follow up rally after many weeks. This has resulted into faster retracement of last falling segment and can mark completion to atleast the short term downtrend. Surprises can be on upside provided the level of 6980 is now protected. Any long positions should use this as very important stop as break below it will continue sideways to negative action. Markets are moving higher despite the extreme pessimism and negative news. Also displaced 54 days cycle low has been due today. All in all the rally should extend beyond 3 days and take out 7255 which will be a very important confirmation for trend reversal. Position yourself accordingly when the majority will be caught in surprise.

Nifty 60 mins chart: Anticipated in the morning of 1^st March 2016

Nifty 60 mins chart: Happened till now

We are constantly mentioning in our research for the highest probability as per Elliott wave theory for the next trend in Nifty.

Part of research from March 18, 2016 is shown below -

From wave perspective, it is unclear for now the terminal point or the end point of minor wave …. as there are new highs in the congestion area and no faster retracement. Few days of price action is required to confirm the pattern under formation. Also if the up move is indeed impulsive then we should not see retracement below 7200 which is the power area of the rise….

So, where Nifty is heading now? Subscribe to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks with in-depth research. For subscription visit Pricing Page

Tech picks L&T, HDFC Bank, HPCL, Ashok Leyland by Ashish kyal on CNBC TV18 18/03/16

Directly from the studio of CNBC TV18. Tech picks L&T, HDFC Bank, HPCL, Ashok Leyland, etc

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