Tuesday, May 23, 2017

Midcap, Smallcap crash – Nifty Gann analysis, Neo wave, Time cycles all aligned together!

Midcap and Smallcap indices are crashing with sharp decline seen in Pharma stocks. This might come as a surprise to majority of traders but Elliott wave and breadth indicator hinted towards reversal.

Sharp decline in market leaders is the preliminary sign of change in medium term trend. Movement on Nifty has been in lock step fashion as per the monthly research report – The Financial Waves Monthly update.

Nifty reversed after forming a top near 9533 levels, overshooting the Gann projected level by less than a percent. This Gann projection level of 9458 was shown in our Monthly research report.

Anticipated on 4th April 2017 in monthly research report - Gann square of Nine Price projection Hurst’s Time cycles:

Happened as of 4th May and path ahead shown:

Happened as of 22nd May 2017:

The above three charts clearly shows how precisely Nifty has moved as per Gann projected levels, Neo wave pattern, Time cycles all combined together.  Many might be looking at the news or other fundamental data to identify the reason for sharp selloff in the Midcap and Smallcap space and reversal in Nifty. But using the most advanced technical analysis method we have been able to capture the move precisely irrespective of event either in Global markets or in India.

Anticipated in the monthly update of 4th April 2017 – “..looking at the overall trend so far the best strategy to follow is the weekly bar method. Unless we see close below the previous week low which is at 9024 the trend will remain positive. Also as per Gann analysis method the next level to look forward to is 9458 which is lying on the 180 degree angle. Path shown above looks like one of the probabilistic outcome…” BANG ON!

Happened: Nifty moved precisely as per the pattern shown in the monthly update on 4th April and can be seen from second chart shown on 5th May 2017.

Anticipated in the monthly update on 5th May 2017 - The path ahead shown on 5th May 2017 in second chart has also worked out in synchronous fashion with the Gann projected level just exceeding by a few percentage and then the reversal on Nifty, Midcap and Smallcap indices. Following was mentioned in that report - Path Ahead: Nifty path ahead is shown in figure 8. We can clearly see triple negative divergence so far which confirms our apprehension of topping process is ongoing. There is a possibility that we see one more push towards the level of Gann projection of 9458 but that is not necessary. Since we are in matured stages of rally one should stay alert in case the selling pressure intensifies over next few days.

Happened: Nifty indeed moved higher to retest the previous highs and reversed sharply as per the path shown from 9532 levels.

The movement has been also accurate as per the short term pattern which is covered in daily research report – The Financial Waves short term update. The above research clearly highlights the fact that market moves are predictable using Elliott wave pattern. We took a step forward and combined these advanced techniques together to forecasts the path ahead.

If you still think Midcap and Smallcap are crashing due to uncertainty related to Trump or Global markets, Think Again! US index has recovered back but we continued to drift lower!!!
Subscribe Now and get detailed chart analysis with explanation on basic technical analysis combined with Advanced concepts like Gann analysis, Elliott wave, Neo wave and Time cycles and see yourself if we are headed for a crash post topping process is complete! For more details - Contact US or visit www.wavesstrategy.com

P.S. - Trading based on news can be random but following the pattern is the scientific approach...


Thursday, May 18, 2017

Nifty: Application of Neo wave, Channels, AD Line, Moving averages!

Understanding the trend of Nifty with application of basic and advanced technical analysis concept along with Market breadth indicators.
Nifty has made life time high at 9532 level in the current week and post the same there is some sideways to negative action happening in today’s session. We believe that price is the supreme indicator and thus advanced concepts like Elliott wave, Neo wave helps us to understand the trend. Apart from this it is also important to looks at market breadth indicators such A/D line – Advance/Decline line. Breadth indicator is nothing but it gauges the percentage of stocks which is uptrend as against to stocks which are in downtrend. Declining AD Line is always a concern as it suggests number of stocks in decline is higher as compared to advancing stocks. Below we have shown part of research taken from “The Financial Waves Short Term Update” which was published in today’s morning.
Nifty daily chart:


Wave analysis:
(Part of research taken from today’s morning research report – “The Financial Waves Short Term Update”)
“In the previous update we mentioned that, “Nifty trend remains positive as long as 9370 is intact on downside. 9530-9550 is the next resistance zone to watch on upside.”
Understanding sector participation: In the last trading session Nifty consolidated till 1 p.m and post the same prices rallied towards 9530 levels. On net basis there was not much change and prices closed on a positive note with 13 points gain. During the same time, stock specific action has continued in which Tata Steel gained 8%, IB Housing Finance (3%), Tata Motors (2.60%), ICICI Bank (2.25%) respectively. During the uptrend we often witness rotational rally and hence it is better to trade stock specific in the direction of the trend as long as Nifty is sustaining above important support levels. Sector wise outperformance in Metal and Auto was witnessed which closed in the positive territory.
The daily chart of Nifty shows that prices have been intact in blue upward moving channel which is connecting the important lows of 7893 and 9075 level. Few days back Nifty tested this channel support and resumed the uptrend. Hence as long as this channel is protected, it is better not to catch the top. As per wave perspective, prices are in wave …. of Diametric pattern which is subdividing further. Forecasting of wave g is little tricky as it has broken above the black channel resistance and hence as long as pivot lows ……
We have shown Advance/Decline line which was shown few days back as well in this research report. We are again showing this as Nifty is trading at life time highs and the overall breadth has continued to deteriorate. In fact, this AD line is now on verge of crossing below the levels seen in beginning of 2017. This indicates negative divergence between the market and its internal health. Hence one should trade with strict risk management strategy.
(60 mins chart with Elliott/ Neo wave is not shown here which is covered in research report)
As shown in 60 mins chart, prices are trading close to the upward moving channel resistance. The major drawback of this channel is that as and when sideways action happen, it creates further room on upside. Hence it is better to keep an eye on important areas. ….. is the immediate support where black channel support is also placed.
In short, Nifty trend is positive but it is near to the channel resistance so expect some consolidation. …. is the important immediate support for now and avoid catching a top unless ……
The volatility is going to increase in next few days and in this volatility one should not get carried away and following the important reversal area along with pattern is vital. Subscribe to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.


Wednesday, May 10, 2017

Nifty breakout above 9370 but why RSI, Advance decline line is very concerning?

Nifty has continued to move in the unchartered territory with a positive breakout seen in today’s trading session. This will keep the short term trend positive.

With markets moving in unchartered territory is it time to stay complacent or cautious? Look at the below research published today morning in our daily equity report “The Financial Waves short term update”

Nifty daily chart:





Chart courtesy: icharts

Plot using charting tool on our website click on the symbols - Nifty, Midcap, Smallcap

Following is part of the research published today morning in our equity research report -
In previous update we mentioned that,Nifty is intact in narrow range. Wait for decisive breakout. Move above 9370 will result in to continuation of positive trend in form of wave g whereas break below 9270 will be negative sign

Nifty has continued to do what it has been doing during the entire trend which started from 7900 levels i.e. exhibiting trending move for 3 to 4 days and then moving in a range for twice to thrice that time. It has been almost 8 days since Nifty has been moving in a narrow range of 9270 and 9370 levels. Stock specific movement has continued during this phase but as mentioned earlier not all stocks are participating.

Advance decline ratio helps us to gauge the overall momentum when the broader market index like Midcap and Smallcap are hitting new life time highs. We can clearly see from the chart shown above that Advance decline line has not improved at all and it has continued to deteriorate with the rally. This is not a healthy sign from medium term perspective and it indicates that only a few stocks are leading the rally in high beta indices. Nevertheless, there is no negative price confirmation as yet and so the trend will remain cautiously positive.

 As shown on daily chart, prices are exhibiting series of negative divergence with respect to indicator RSI. There is nearly 3 negative divergence i.e. prices made new high but momentum indicator made lower highs. It is not very often to see such series of negative divergences that to on a daily scale. As per Advanced concepts of Elliott wave Neo wave, faster retracement of the last wave provides confirmation that the recent trend is over and the move on opposite side has started. So faster retracement below ……… followed by complete retracement of wave …….. will confirm move on opposite side has started but unless that happens one should play the range i.e. buying near supports and ………… Breakout above 9370 will extend this rally further towards the Gann projection levels of ……………. shown in current monthly research report.

As shown on hourly chart, (shown in actual research report)  There is a possibility that wave g is forming a ……….. pattern and currently wave b is in formation in the form of Diametric structure. This wave b has already consumed 8 days. So for this to be a valid pattern we need to see positive breakout soon above 9370 levels.

In short, ………

Nifty has been moving precisely as expected and the path given in the monthly research report. The pattern has been playing out well but we are now going to take a cautious stand given the series of negative divergences and deteriorating breadth. There is no negative price confirmation yet and prices are headed towards our mentioned target levels exactly as expected. The Financial Waves short term update will provide detailed outlook on Nifty and what is the trend after it reaches the target levels. Subscribe NOW using the Summer offer and see yourself the urgency of knowing the important supports at this time. The accuracy has been very high as the pattern is playing out precisely!

Friday, May 5, 2017

Is Nifty entering into Topping zone?



#ElliottWave news channel is a short video series. Ashish Kyal, CMT founder of Waves Strategy Advisors 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 #TimeCycle

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Thursday, May 4, 2017

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