Video update: Nifty Outlook by Ashish Kyal using Elliott Wave!!!

Following video was published on 2nd September 2016


#ElliottWave news channel is a short video series. Ashish Kyal, CMT 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.

 #AskAshishKyal

Reliance JIO disrupting the Telecom sector! What is next for Idea, Bharti, RCom?

Reliance JIO – much awaited AGM finally concluded revealing the tariff plan for its JIO customers.

It is indeed a revolution within the telecom space and it is going to redefine the way telecom industry exists as of now. Free voice call is going to drastically hit the profit margins of other telecom operators and they will have the redefine their business model. This will help India get digitally connected but at the cost shareholders profitability over medium term. In the long run I do not rule out the possibility of converting the Datagiri in profitability but for now it is a nervous sign for telecom sector as a whole and glorious step towards connecting India digitally!

Now let us look at the charts of a few telecom stocks – Bharti, Idea along with Reliance Industries (though it does not represent Jio separately)

The above clearly shows that the telecom stocks have been in sideways action for many years now. The consolidation is going on since the top was formed in 2008. Reliance Industries has been one of a major dragger on index for many years even when Crude prices have been all over the places during this period.

Let us see if the disruptive method of entering into the much awaited telecom foray, results into a huge change the way industry functions or it simply fads away! These are surely interesting times and the shareholders might be anxious to see what happens by March 2017!

How to trade Nifty Post Fed meet?

Trading Equity and Nifty by looking at various technical indicators like Breadth, Channels, Elliott wave, Net new monthly high lows and more.

Indian Equity Markets has been moving in a range from last few weeks. Traders and investors were waiting for Yellen’s speech which completed on Saturday last week. Fed has given hint towards the first rate hike since last December. But post the speech there is mixed reaction in Asian Equity Markets.  Nikkie 225 gained 2.30%, Hang Seng index lost 0.45% and Shanghai had flat closing. So the hint towards the rate hike has not resulted in to any knee jerk reaction in Asian Markets till now. Nifty is trading on the flat note as on 1.25 p.m. Now the question arises what should be the trading strategy for Nifty from here on?

We believe that news or event results into short term spikes and post which original trend should start. “The Financial Waves Short Term Update” covers in-depth research on Nifty with Elliott wave perspective. For us market behavior is most important rather than any news or events. The part of the research is taken from report dated 25th August 2016 which is shown below with Breadth indicators like NSE net monthly highs – lows.

Nifty daily chart:

NSE Net Monthly Highs – Lows:

Courtesy: icharts

Wave analysis:

“In the previous trading session Nifty continued to move in lackluster environment and consolidation was witnessed in between 8660 and 8620 level. Sector wise Midcap and Smallcap index has continued to outperform whereas Bank Nifty has been moving in range after the sharp rise. Stock specific action has continued in which Auro Pharma, Cipla, Maruti and ZEEL were among the top gainers. This suggests that as long as we do not witness decisive breakout in Nifty, it is better to trade with stock specific however one should not leverage much and strict risk management is must.

Understanding Internal Breadth: the entire month August 2016 has been challenging from trading perspective due to the contracting nature of price action. Moreover such contraction is happening near the trendline resistance and hence it becomes crucial to gauge the internal health of market. As per the concept of market breadth, the uptrend is strong if advancing issues are more and declining issues are less however if advances are less and declining issues are high then it is called as deterioration in market breadth. This can be seen by looking at the deteriorating Advance Decline line that has broken below March 2016 lows from where the rally started.

Looking at another Breadth indicator NSE Net Monthly highs Lows chart. This indicates that in the start of July 2016, most number of stocks registered the monthly highs however post that there is clear down trend in this chart. This suggests that as the trend is ongoing fewer stocks are touching the high which is sign of concern. Hence this sends warning signal however it is better to wait for market to confirm the same.

Please note these indicators provide early warning signal but unless there is price confirmation by break of crucial support levels one should not preempt reversal. These levels are respected very well for many weeks now. To get insight into the next crucial level which will hint towards trend changer Subscribe to “The Financial Waves Short Term Update” by simply visiting Pricing Page

Why Moving averages are the keys to successful trading?

In Technical analysis, Moving average is one of the simplest and ideal to way to identify the trend. In most of the books of technical analysis, importance is given to 200 days moving average. For instance, if stock is trading above 200 days MA then trend is positive and vice versa. But, we differ from this stand as it is not all charts or asset class that follows the 200 days MA. Thus it is important to identify which moving average is suiting that particular stock. It is like when you go to the shop to buy cloths. Person will buy that cloth which suits him in size, color, etc. Same is the case with moving average as different stocks follow different averages. Below we have shown chart of Yes Bank taken from “The Financial Waves Short Term Update”.

Yes Bank weekly chart:

The concept of moving average is simple but it is not only for short term trading. It is also useful for medium term investments. Above we have shown chart of Yes Bank which has doubled now from the low made in the start of 2016.  This stock is brilliantly following 5 weeks Exponential moving average. Not a single time prices have given close below 5 weeks EMA since the low made at 650 level in the start of 2016. Prices have maintained its uptrend irrespective of quarterly results or Global market volatility. Isn't it interesting?

Technical analysis is vast subject and therefore it is important to understand the different concepts and post that one should form trading or investment strategy. To know the in-depth research on Nifty and 3 stocks on daily basis, subscribe to “The Financial Waves Short Term Update” and for subscription visit Pricing Page

Nifty inverted scale- What to expect next?

Stock tips and trading on Nifty can be challenging in sideways market. Below shows how charts can be looked differently.

Below is the Nifty 60 mins chart. At first instance one may get surprise as this shows that prices are in downtrend from last few months. However this is not true and we have shown Nifty on inverted scale. Inverted scale means totally the opposite image of the original chart. The reason behind showing this in “The Financial Waves Short Term Update” is to analyze the chart without any bias. The range bound action of last one month has resulted in to more confusion among trader and investors. During such scenario inverted scale chart can provide some hints towards next trend. One should always use price confirmation techniques to confirm the trend. Below research we have taken from the report published in the morning of 23^rd August 2016.   

Nifty Inverted chart: 60 mins

(part of research taken from 23rd August 2016)

Wave analysis:

Nifty had a positive opening but prices drifted lower in the opening hour itself and touched intraday low of 8614 during later part of the day. Movement was absolutely sideways within the narrow band of 8650 and 8620 for most part of the day. Such narrow movement for many days has turned the environment dull and lackluster. Picking up stocks during such conditions is also not easy. Stocks like Voltas, Petronet LNG, Cairn India that were showing strong momentum suddenly reversed with a loss of nearly 3%. This suggests that stock picking can be challenging.

Nifty 60 mins on inverted scale, as we tend to look at patterns differently during a downtrend. As per this chart, Nifty is intact in downward moving channel from last few months. However from the start of August 2016 momentum on downside is not building and there is probable formation of Ending Diagonal Pattern which suggests that trend may be at the matured stage. Again look at the scale which is inverted. Apart from that, 194 hours Time Cycle is working well to capture important reversals. Prices are now close to the same cycle and hence action becomes crucial of next few days. So whether it’s inverted or normal chart, we can see that signs of maturity exhibits on both these charts. This is the ideal way to look at the market without any bias. Nevertheless use of price confirmation is most important to confirm the scenario which we will get only…...

There are many ways to analyze the market and maintaining the objectivity is must while trading. Hence one should be prepared for the next trend with key reversal areas which can guide for the breakout. To know the in-depth research on Nifty with medium term as well as short term Elliott wave counts and 3 stocks, subscribe to “The Financial Waves Short Term Update” Subscribe Now by visiting Pricing Page