Wednesday, March 22, 2017

Where Nifty is headed? Application of Andrews Pitchfork Channel, Elliott wave, momentum, bar technique!

 
Understanding the trend of Nifty with the application of basic as well as advanced technical likes Elliott wave, Andrews Pitchfork Channel.

Why we were alert when Nifty arrived in the zone of 9150-9200?: Post the UP Elections results Nifty had sharp Gap up opening and took out the psychological mark of 9000 in the session of 14th March 2017. After the same buying spree continue in Nifty towards 9150-9200 level. This was the time when majority were extreme bullish and you may have seen many buy calls on Nifty on news media. At the same time our in-depth research technical tools were suggesting us not to be complacent but alert.

In our flagship product “The Financial Waves Short term Update” dated 17th March 2017 we showed Andrews Pitchfork channeling technique on Nifty to our client. At this time prices were exactly lying on the channel resistance from where risk reward on upside was not favorable. (HDFC Bank: Concept of RSI smoothened by Moving average!) Imagine what would have happened next? Prices formed spike above the channel and entered again into it which provided the first weak sign. Since then Nifty has continued to move lower. Such techniques can help us to avoid financial as well as mental loss.

Nifty 60 mins chart:














 

Nifty 60 mins chart: (Happened till now)

















Wave analysis:

Part of research taken from 17th March 2017: On hourly scale we are showing Andrew’s Pitchfork channel. The center line is the median trendline with two equidistant parallel line. This is more systematic way of drawing a channel as it takes into consideration the median prices. Coincidently, this channel is also in sync with our previously drawn parallel trendlines. Yesterday’s close is exactly on this line and so if price action from here on is going to be crucial.

Part of research taken from 20th March 2017: Prices violated the channel resistance in the first hour however post the same it has again entered in to channel. Such action happens when the rally is in matured stages.

The above research clearly indicates our cautious tone based on Andrew’s Pitchfork channel as well as momentum indicators. Post the publishing of this, Nifty has moved lower from 9219 to 9040 level till now. So what should be the trading strategy now?

Subscribe to “The Financial Waves Short Term Update” which covers Nifty and 3 stocks on daily basis.



Tuesday, March 14, 2017

Nifty sharp rise post UP Elections 2017 but prices at upper channel level!



UP election outcome looks like repetition of 2014. BJP's landslide victory in UP clearly suggests strong hold BJP now has over majority of the states which makes their position very strong for the central elections in 2019. Modi wave looks to be stronger than before and post Demonetization this showcases increasing faith people are showing in him. This definitely puts forward for stronger growth over years to come and uplifts the positive sentiments. This time as well the rally started well before the election outcome but what is going to be crucial is the Gap area that should remain unfilled. India is probably headed for exponential growth from long term perspective
 
In 2014, post the result announcement, Nifty had a huge Gap up opening but prices started to fill the Gap during the day. Later, Sensex entered into red territory even though temporarily on the same day. It will be important to see if such repetition of events results into similar outcome during the day. 

Exit polls released on Thursday was already hinting towards BJP victory in UP but that did not result into any major movement on Friday. It seems reliability on exit polls is on decline. This created a tricky situation on Friday for traders as it was absolutely unclear which way markets want to head.  

Now look at the below chart which shows important channel on an hourly scale.

Nifty 60 mins chart:

















In the morning Equity research report we mentioned the following:

“As shown on daily chart, prices are moving below the lower trendline of the channel. Let us see if prices can now move back above this trendline resistance and close above it. The resistance is near 9100 - 9120 levels as of now. However it will increase with each passing day. 

Over short term we will continue to keep the existing wave counts intact with wave …….. of Diametric pattern currently ongoing. The equality of wave …….. with that of wave a comes to about 9090 levels for now but movement on back of event outcome can result into short term euphoric rise. During such times day's closing becomes extremely important.”

Now look at the above modified channel which highlights how precisely prices are contained within this channel. Today’s high post opening was exactly on the channel resistance at 9122.75 mentioned in the morning before markets opened.

This only shows power of one simple technique which is the most basic fundamental even to Elliott wave – Neo wave analysis. Analysts following advanced methods tend to ignore the lifeline and foundation of technical analysis which can result into disastrous outcome. So even if you do not use any other methods but follow one simple trend following method like Moving averages shown above on 60 minutes chart along with channels it gives very important trigger for entering or exiting the trades irrespective of the event!
Detailed analysis and trading strategy post the event will be published in tomorrow morning’s research report – The Financial Waves short term update

Attend the most advanced training on Elliott wave – Neo wave, Time cycles and combining it with basic technical analysis for high conviction trade setups in Mumbai scheduled on 18th and 19th March. Also get free access to research products and online access to basic Elliott waves before the training itself. Limited seats left… Enroll NOW!





Friday, March 10, 2017

Webinar: Nifty Time cycles and its importance with Neo wave!



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

Training on Gann / Hurst’s Time cycles, Neo wave combined with basic Technical analysis – Attend the two days workshop on 18th and 19th March 2017 that will focus on how to derive trades based on above techniques. This training will initiate you towards different aspects of Technical analysis methods along with practical charts across time frames. Post the training get access to Free research reports to ensure the learning is ongoing with ability to share across charts on our Discussion forum and closed groups. Limited seats left.. This can be one of the most prudent investments! Enroll for Most Advanced Technical analysis training.

Wednesday, March 8, 2017

Nifty: Revisiting Hurst’s Time cycles with Neo wave! Why basic technicals are equally important?



Time cycles are different study within Technical analysis that helps to understand the overall maturity of trend along with key reversal days. It focuses on timing the market can also be used for price projections.
Like any other indicators we use Time cycles as a secondary confirmation to prices. The reason being Time is a challenging element and is more accurate capturing lows rather than tops. Nevertheless, it still gives us some sense of indication if we are within the topping zone. 

For price forecasting we rely largely on Neo wave conceptsAdvanced Elliott wave. If the pattern under formation is clear then it is thrilling experience to see each and every movement as per the assumed pattern. The challenge arises when prices start deviating from the assumed pattern hinting that some other structure is probably forming. It is during this time we have to fall back upon the classical technical analysis methods and trend following systems like Bar techniques, RSI and Moving averages.

Now look at below chart for understanding Time cycles:



















Nifty Neo wave plot:















The first chart shows bottoming Hurst’s Time cycles. This cycle has worked very well capturing important lows. We try to use this cycle to look at the tops occasionally but unless there is price confirmation capturing a top in a trending market can be tricky. Nevertheless, cycles normally enters into topping zone in their second half. This cycle has now entered into its second half zone so we are not complacent like majority but alert. This does not mean one should go on shorting the market but it is just helping us to stay aware so that there are no negative surprises.

Neo wave plot: Now this is important chart shown above which is plotted as per Neo wave. Please note the time scale is missing because the plot is different than normal Line charts or Bar charts. The internal counts are marked on this chart with Diametric pattern followed by wave x then a Zigzag again wave x (refer Fractal Nature for wave x) and now again a Diametric pattern is assumed. In case prices start deviating from the expected outcome we will then have to look at other possible patterns but until then we will assume this is the structure under formation. Also these counts are in sync with the Time cycles shown above.

Price and Time confirmation is the key to trading success! Majority of the traders try to pre-empt the moves even before confirmation and then they point towards inefficiency of the theory. Please understand when the structure is unfolding we are assuming and identifying it with a pattern that looks probable. Therefore we have to wait for break of support or resistance levels along with Moving averages and Bar techniques before finally pulling the trigger on the short or long side. Detailed discussion on key reversal areas with levels that will determine the medium term trend are mentioned in our daily research report – The Financial Waves short term update

Training on Gann / Hurst’s Time cycles, Neo wave combined with basic Technical analysis – Attend the two days workshop on 18th and 19th March 2017 that will focus on how to derive trades based on above techniques. This training will initiate you towards different aspects of Technical analysis methods along with practical charts across time frames. Post the training get access to Free research reports to ensure the learning is ongoing with ability to share across charts on our Discussion forum and closed groups. Limited seats left.. This can be one of the most prudent investments! Enroll for Most Advanced Technical analysis training.

Monday, March 6, 2017

ICICI Bank: Neo wave Extracting Triangle Pattern and Topping Time cycles!




Identifying the Neo wave pattern and Time cycles to understand the trend of ICICI Bank.

Neo wave is the advanced Elliott wave concept has more than 15 rules which should be followed for impulsive waves. If one of the rules is not met then pattern is simply corrective in nature. Neo wave has introduced a few newer patterns which is not covered in Elliott wave such as Diametric pattern, Neutral Triangle pattern, Extracting Triangle pattern. These all patterns are corrective in nature and have different rules. Below we have shown daily chart of ICICI Bank which shows that second correction is forming Extracting Triangle pattern. Here we can see that downside legs are getting bigger whereas upside legs are smaller in nature. Apart from that there is 70 days Time cycle which is working as topping one from the start of 2016. Below we have shown part of research taken from The Financial Waves Short Term Update.   

ICICI Bank daily chart:




















 Wave analysis:

As shown in daily chart of ICICI Bank, since 2016 this stock has continued to move in an upward moving channel. This time prices have failed to reach towards the channel resistance and have started to show weakness. Moreover this reversal has taken place when 70 days Time cycle was due in last week. This cycle has worked as important topping cycle in the past occasions and hence one should not ignore the same. In the current week prices have taken out low of prior weeks lows which will keep bias on negative side. MACD is also moving below signal line which indicates bearishness.

(The internal wave counts is shown on 60 mins chart which is shown in original report)

As shown in 60 mins chart, recently prices have broken the blue channel support and as of now hovering around the same. The fall was sharp in nature which increases the odd that minute wave (e) of minor wave e might have completed. Prices have also formed tilted Head and shoulder pattern which is a reversal pattern and forms during the stage of distribution. On upside ……. is the important resistance.

In short, ICICI Bank is now at important levels. Close below .followed by break of low of wave (d) near .will confirm the bearish outlook. Please note breaking of pivot support levels is important in the current market scenario.

To know in-depth research on Nifty and 3 stocks on daily basis subscribe to The Financial Waves Short Term Update

Training on Time cycles using Gann, Hursts method combining with Neo wave Advanced Elliott wave Attend the two days seminar on 18th and 19th March 2017 Most advanced technical analysis training ever. These methods are not easy to implement so you can share across your charts and findings on our Discussion Forums and get inputs to keep the learning ongoing in most practical ways. More details on Neo wave and Time cycles. Few Seats left. This can be one of the best investments you can make!