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