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Copper Fall Anticipated a DAY BEFORE!!!
By Vishal Dalvi
April 20, 2012 Friday 6:00 pm
Below excerpt is picked up from "The Commodity Edge short term update" that is published everyday morning before commodity market opens. We have purposely deleted Daily chart that shows where Copper is headed over medium term. Write to us on helpdesk@wavescapital.com if you would like to subscribe to this Daily research publication and see short to medium term trend of Gold / Silver / Copper and Crude.
MCX COPPER: 60 MIN CHART - April CONTRACT
ANTICIPATED on 4th April 2012
HAPPENED on 5th April 2012 (next day)
Wave Analysis:
On 4th April we mentioned in our Commodity Short term update report that “Copper prices are forming a complex corrective pattern and we are in the last leg of the corrective wave Z. 434.50 has been acting as a strong support for few days now. A move below 434.5 could indicate a possibility of the correction being over on the upside and we could start the next leg down. Though it is too early to say as of now but a Bearish closing today may indicate a significant top in Copper prices and we could be headed much lower from here on towards 420 or even lower towards 412 levels”.
Copper gave a bearish closing that day and you can see yourself how copper has been falling continuously since then to make a low of 414.95 the very next day. This is the power of Elliott Wave Principle and we have been able to catch such moves in Copper time and again.
Subscribe now to “The Commodity Edge Short Term Update” report, a flag ship product for the Indian Commodity Markets and get such trading ideas. Write to us on helpdesk@wavescapital.com for more information.
Nifty Trading using Elliott wave structure:
By Ashish Kyal, CMT
March 26, 2012 Monday 6:00 pm
Below excerpts are picked up from past Financial Edge short term update and this itself proves how accurately we are measuring the pulse of Indian markets. Write to us on helpdesk@wavescapital.com if you would like to subscribe to this Daily research publication on Indian Equity market.
Nifty Daily chart:
Published on 7th March 2012 before 8:30 am
Published on 7th March 2012 before 8:30 am: "The fall is overlapping and well defined within the red corrective channel. So structurally this looks like b wave of minor degree is complete and c up shall start. In short, to make things clearer, any move above 5300 will increase the odds of Scenario 2 (positive) is under play…."
Happened on 9th March 2012: Nifty opened with a gap up of almost 80 points on 9th March. Prices opened near 5300 (previous day close was 5220) and closed at 5333 for the day on 9th itself, a move of more than 110 points from previous day’s close.
Published on 16th March 2012 before 8:30 am
Published on 16th March 2012 before 8:30 am: "We have analyzed past history and how prices behave before and after Budgets and it has been observed that most of the time Budgets acted as short term trend changer. The trend had been up from 5180 level to 5500 and we can now be reversing that trend and have probably started wave C down. Decisive close below 5330 – 5350 will indicate next leg down towards 4900 has started."
Happened: Prices broke below 5350 and closed at 5185 as on 26th March 2012.
Happened as on close of 26th March 2012:
Happened as on close of 26th March 2012: The above chart shows movement of Nifty in lines with our wave counts first shown on 7th March 2012. Nifty closed the day at 5185. However the structure has changed lately. Subscribe Now to see what structural dynamics Indian markets are exhibiting.
Write to us on helpdesk@wavescapital.com for subscribing to The Financial Edge report and see it yourself well before market opens what Nifty and stocks are going to do for the day!
Suzlon: A journey of 96% fall!
By Ashish Kyal, CMT
Mar 15, 2012 Mon 4:00 pm
The Financial Edge short term update, is a flagship product of Waves Capital and this report applies Time Cycles, Elliott Waves, Price ROC, other Technical indicators on Nifty and other 3 stocks where we seeing developing opportunity. Write to us on helpdesk@wavescapital.com to subscribe NOW to see what lies ahead for Indian markets!
Suzlon Weekly chart:
Wave analysis:
This excerpt is picked from Financial Edge short term update report published on 13th March 2012.
Suzlon weekly log chart shows a steep fall from the level of 450 in Jan 2008 to 33 in March 2009. The entire down move was impulsive and can be counted as 5 waves. The rally since then has been in complex corrective fashion in the form of W-X-Y and we probably ended wave (B) at 56.
From 56 level prices fell steeply towards 17.20 levels in the form of impulse wave. It is difficult to conclude now if we have completed entire wave C at the low on 7th Jan 2012 or this was just wave i of C. The latter suggest there are more down waves pending and prices can come down to as low as single digits. However if we have ended entire wave C at 17.20, it will indicate the correction from the top at 450 to the bottom at 17.20 is complete and years long bear trend has come to an end. Complete retracement of wave C i.e. a move above 56 will confirm this scenario.
Prices are now lying at crucial resistance level near 34 which is also wave (A) low made in 2009. A break above this can take prices towards upper channel resistance at 43 – 44 from a month horizon.
From medium to long term perspective, we will observe if prices move above 56, it will indicate strong leg up has started and secular trend will then change from down to up. A move back below 17.20 will indicate bear trend in full force and prices can come down in single digits.
Crude and Sensex – Inverse correlation a Myth!
By Ashish Kyal, CMT
Mar 12, 2012 Mon 4:00 pm
Is there really any inverse correlation between Indian markets and Crude prices???
We are showing Crude (MCX) in INR and Sensex weekly chart which clearly shows how prices of both these asset classes have been moving since July 2008. The chart itself is self explanatory and challenges the logical perceptions of many people who think Crude prices impact Indian stock markets directly and is a culprit for poor performance of Indian equities in 2011.
Crude and Sensex Weekly chart:
(Click to enlarge image)
We can see that Sensex had started the downtrend in Jan 2008 and Crude joined the party in July 2008. From July 2008 both Sensex and Crude fell in lock step manner and made a low in Feb 2009 “together”.
Since late Feb till November 2010 the rally continued again in a lock step manner and the period of sideways consolidation, from October 2009 to May 2010, had very high correlation. In fact one could have even guessed what Sensex direction would have been during that period by looking at movement of Crude.
This period of high correlation continued till November 2010 and Indian markets again lead like in 2009 and started falling prior to Crude. After 4 months of opposite direction, Crude joined the Indian markets down trend in April 2011 and continued to move in sync till October 2011.
In short, we can clearly note there have been more periods of direct correlation between Crude and Sensex and the facts clearly outweighs the common belief / perception of inverse relation between Indian markets and Crude prices.
For more information on any of our “Research products” in Equity, Commodity, Currency, please write to us on helpdesk@wavescapital.com
USDJPY: A major trend reversal!
By Anita Joshi
Mar 09, 2012 Fri 8:00 pm
An Ending Diagonal Elliott wave pattern: USDJPY shows a breakout from typical wedge shaped structure known as Ending diagonal in Elliott wave theory. See yourself what we expect this major curreny pair to do after moving out from months long pattern...
USDJPY WEEKLY CHART:
Wave Analysis:
USDJPY has been forming a strong positive divergence since 2010 onwards. Prices have been forming lower lows whereas RSI has been forming higher lows. From weekly chart, we can see a typical Elliott wave “Ending diagonal” pattern. A breakout of this pattern indicates strong reversal. Ending Diagonals are wedge shaped patterns where prices make lower lows but on lose of momentum, thereby indicating the trend is losing steam.
USDJPY giving strong positive breakout indicates a long term trend reversal. This is also bullish for Japanese equity index – Nikkei. This index might be coming out of its long term down trend.
Finally, depreciation in Yen can bring in much needed relief for Japanese export oriented industry and the country might finally be near the end of its fight against deflation!
We can see on the weekly chart, that the crucial resistance level of 80 is breached on the higher side, accompanied by positive divergence on the RSI. It indicates positive momentum on the prices in future. A sustained move above 80 is likely to see a push higher at least towards 84/85 levels. A break above 85 will open opportunities for this pair to rally as high as 100 from medium to longer term perspective.
For more information and details on our various research products please write to us on helpdesk@wavescapital.com.
Nifty Scenario analysis:
By Ashish Kyal, CMT
Mar 07, 2012 Wed 2:00 pm
Financial Edge Short term update - The below excerpt is picked up from Daily report of Financial Edge short term update which shows Nifty predictions on daily basis and what we expect prices to do over short to medium term. Write on helpdesk@wavescapital.com to subscribe NOW..
Nifty Daily chart, Scenario 1:
Nifty Daily, Scenario 2:
Nifty 30 mins chart:
Nifty had a very volatile session yesterday. Markets opened with a gap down and made a low of 5225 very quickly in first 15 minutes. This was actually a confirmation of a break down and shorts would have been initiated at this level. However there was a strong pull back and Nifty rallied to as high as 5375 in less than 2 hours. This up move would have been sufficient to trigger bullish impulses among traders and many longs would have been initiated exactly near the highs of the day. The hopes of bulls were also short lived and the selloff after that was again significant to trigger stop losses of long positions. In short, it was one of the most difficult days for many traders both emotionally and monetarily since swings on either side were sufficient enough to trigger long and short positions as well as stop losses.
It is therefore imperative to have a strict money management strategy in place along with risk management. Such emotionally challenging days will come back again when we have big events lined up – Budget, Monetary policy, etc. It is only after market close, analysis of the day starts and traders start thinking what could have been done differently. Our view is staying away from markets during such eventful days is better but it is difficult to put that into practice. However if staying away is difficult, we do not think it is wrong to get whipsawed on either directions but Risk and Money management is prudent. Also a strategy of close can be adopted and directional bet shall be made during last half an hour of trading to understand the market bias.
As shown on daily chart, we have 2 plausible scenarios. First scenario suggests ................. Scenario 2 suggests .........................
Scenario 1 looks plausible from bias perspective and the day closed near the low which supports this scenario. Also the bar is big bearish engulfing and so is negative.
Scenario 2 looks plausible as we can see on 30 mins chart, the fall is overlapping and well defined within the red corrective channel. So structurally this looks like b wave of minor degree and c up shall start.
In short, to make things clearer, any move ................will increase the odds of Scenario 2 (..........) is under play and any move ............. increases odds in favor of Scenario 1 (............).
Subscribe now to see the missing text and where we think Indian markets are headed along with stocks that provide best trading opportunity. Write to us on helpdesk@wavescapital.com for more information.
Nifty / Sensex sideways action continues:
By Ashish Kyal, CMT
Mar 03, 2012 Saturday 5:00 pm
Waves Capital: Financial Edge Short term update - The below excerpt is picked up from Daily report of Financial Edge short term update which shows Nifty predictions on daily basis and what we expect prices to do over short to medium term. Write on helpdesk@wavescapital.com to subscribe NOW...
Nifty 30 mins chart:
Anticipated on 1st March 2012:
Happened:
We mentioned before on 1st March 2012 Financial Edge report “Failure of prices to give any followup rally confirms b wave formation as non impulsive. We are moving very well in the channel and so the current down move is corrective. As shown on 60 mins chart, prices failed to retrace the complete of previous wave i.e. c wave of second zigzag in lesser time and so current up move is an x wave and next move down can be in the form of sideways consolidation or triangle. The technical structure shown by Nifty as 1 day down by 150 points, next day up by almost 100 points usually happens when we form triangle patterns. This week we shall continue to see range bound movements with prices coming down again today or tomorrow and moving in a broad range of 5300 – 5450.
Any move above 5450 will increase the odds that the down move is complete and we can again test previous highs near 5620. However unless that happens we will avoid initiating fresh longs and getting whipsawed every other day. Please trade cautiously and in small proportions during such environment and ensure not to lose profits registered during trending moves.
In short, we are looking at range bound movement on Nifty between 5450 and 5300. Any move below 5270 will indicate downward leg has resumed and a close above 5450 will indicate uptrend has started. However latter looks a lower probability as of now and we shall start consolidating in a range!” BANG ON!!!
We have been able to capture the most difficult aspect of market – sideways action. It is very difficult to forecast a sideways action and sideways consolidations are emotionally and monetarily draining if caught on wrong sides during each leg of triangle formation.
We can continue this sideways action for first half of the week to complete remaining pending legs of triangle. Nifty shall then …………………
In short, it is advisable to keep trading positions low and ………...
Subscribe now to read which direction we expect breakout to happen and what path we think Indian markets will follow...
Write to us on helpdesk@wavescapital.com for more information.
Patterned nature of freely traded Markets makes them Predictable!
By Ashish Kyal, CMT
Feb 28, 2012 Tuesday 4:00 pm
We, at Waves Capital, believe in the theory that freely traded markets are patterned and exhibits fractal nature. This makes them behave in a predictable manner. By pattern we mean that there are certain structures that repeat itself from time to time and can be seen on charts that shows prices of any tradable instrument. The “Fractal Nature” is again an important concept which states that these repeatable patterns occur on varied time scales and can be seen on 1 minute charts to Daily charts to Monthly charts. Fractal structure is seen in nature across from DNA to snowflakes to galaxies and so it is also seen in stock markets which reflect collective emotions and social mood of humans.
Humans behave in a manner, when given a stimulus, in similar and probabilistically predictable fashion. This behavior of acting in similar ways makes us no different than the other creations of nature. Freely traded markets are the only sources that reflect the collective behavior of humans and the current social mood. Highly liquid markets cancel out the random events and what is left is the social mood of the mass and that indicates what we can expect in the future. We believe that any freely traded markets like Equities, Forex, Commodities move in the form of repeatable wave patterns that exhibit fractal nature at various degrees. This behavior was first observed by Ralph Nelson Elliott in 1930s and was later revisited by Robert Prechter in 1980s. This study of waves is now famously known as Elliott Wave.
We identified this important Fractal formation in Indian stock markets on 20th February 2011. The below chart shows a weekly Nifty chart with big “Election gap” when markets hit upper circuit and a 15 minutes chart on the right with a small intraday gap. This is the best Fractal example one can find in stock markets:
Nifty weekly chart: Nifty 15 mins chart:
(Click to Enlarge the image)
Elliott wave provides us the tool to identify these repeating Patterns & Fractal nature of markets and helps us exploit them to our advantage.
chart courtesy: Elliott Wave International
As per Robert Prechter, the above chart shows Elliott's idea of how the stock market is patterned. If you study this depiction, you will see that each component, or "wave," within the overall structure subdivides in a specific way by one simple rule: If the wave is heading in the same direction as the wave of one larger degree, then it subdivides into five waves. If the wave is heading in the opposite direction as the wave of one larger degree, then it subdivides into three waves (or a variation).
This Elliott wave pattern is seen across the world major stock indices.
Everything in this world is symmetrical & patterned and there is no place for randomness to exist for extended period of time. We are against the theory of Efficient Market Hypothesis that claims humans are rational animals. This is against the law of nature and humans do deviate away from rationality and choose the path of herding thereby exhibiting trends & patterns of repeatable forms / structures, making it plausible to predict the markets.
There is no chaos in this perfectly rhythmic world which is driven by the laws of nature and freely traded markets like stock markets are no exception!
Contact information: Email: helpdesk@wavescapital.com, Follow us on Linkedin / Facebook / Twitter: WavesCapital
Nifty intermediate top in place!
By Ashish Kyal, CMT
Feb 27, 2012 Monday 6:00 pm
The following excerpt is from Financial Edge short term update published today before 8:30 am well before Indian markets opened. We have been very accurate in warning our readers to refrain from initiating any long positions and we were bearish very near to the top.
Financial Edge short term update, is a flagship product of Waves Capital and this report applies Time Cycles, Elliott Waves, Price ROC, other Technical indicators on Nifty and other 3 stocks where we seeing developing opportunity. Write to us on helpdesk@wavescapital.com to subscribe NOW to see what lies ahead for Indian markets!
Following charts were published on 27th Feb 2012, before 8:30 am
Nifty Daily chart: (wave counts are purposely blurred out)
Nifty hourly chart: published before 8:30 am on 27th Feb 2012
(wave counts are purposely blurred out)
Nifty Happened on 27th Feb itself 3:30 pm, 10 mins chart
Below text is reproduced from the Financial Edge short term update published on 27th Feb before Indian markets opened: Happened: Nifty closed with a fall of almost 150 points (2.75%)down on the same day!!!
Nifty continued to move in downward direction. Advanced decline continues to deteriorate with 1800 declining stocks vs 1080 advancing on BSE. There is no relief rally either in smallcap or midcap space. All this continues to confirm our stand that current down move will lasts atleast for few weeks now.
As seen from Nifty weekly chart, we have a big red candle this week for first time since 4600. Psychologically many traders might still be holding onto their long positions and assuming the current pullback as minor downside correction. Fall might gain acceleration when longs start getting unwind. Objectively, long positions shall be exited unless we move back above 5570 which will then confirm current pull back as minor correction. But unless that happens we maintain our bearish stand.
As seen on 60 mins chart, we have now drawn a new blue channel. Prices are well confined within this band. Please lower your stops now towards 5540 levels.
We mentioned in our report published on 2nd January 2012, “An end of terminal pattern result in euphoric rise that retraces the complete previous down pattern in less than half the time and sometimes in just a fourth of the time. A move up as shown on chart will be surprise to many but not to our readers.
An up euphoria will then be created by Nifty breaking above crucial resistance levels as shown and a new up trend has started in 2012 will be the talk of the town. Nifty can move high to as much as 5600 – 5800 levels. However we would be looking out for shorting opportunity…”
And following is the statement by “IIFL” yesterday on current rally in Indian markets -
“If I had to choose one of the options, then I'll say it is the beginning of a bull market rather than a bear market rally…”
We can clearly see drastic shift in the sentiments from acute pessimism to extreme optimism. This is not a surprise to us and we had clearly mentioned this will happen on 2nd January 2012. Also the statement has come exactly at the time when we are looking for shorting opportunities.
In short, the trend continues to be down and sentiments along with USDINR are supporting our bearish stand which might last atleast for few weeks. Any move above 5570 will however indicate one more minor up leg is pending after which the correction will start but that looks like a lower probability scenario as of now.
Write to us on helpdesk@wavescapital.com to see what lies ahead for Indian Equity markets...
USDINR at crucial Juncture!
By Ashish Kyal, CMT
Feb 24, 2012 Friday 4:30 pm
See yourself what do we think of Indian Rupee against US Dollar (USDINR). Prices have been moving in predictable fashion and forming very clear Elliott wave patterns.
USDINR (Feb Contract): Daily chart
Prices moved up in 5 waves and made a high near 55.06 (Feb contract). From there we corrected in the form of wave A till 49. We are now bullish on USDINR for following reasons:
1. 61.8% retracement of entire move up from 45.45 to 55.06 (Feb contract) is at 49
2. Previous 4th wave support is at 49
3. Internal wave counts show we are in 5th wave which is forming as ending diagonal
4. Time cycles show we are nearing a bottom very soon and shall start rallying (i.e. USDINR move up) anytime now
5. 10 period ROC is showing strong positive divergence with respect to price and has now moved towards 0 levels.
We think that USDINR shall bottom anytime now in next week and start a strong leg up which will take prices atleast towards 51 – 51.50 levels. Let us wait and watch if we are measuring this currency pair correctly with our technical tools!
For more information on Forex Financial Edge short term update, which is published on alternate days that show not only USDINR but also other cross pairs GBPINR, JPYINR, EURINR, write to us on helpdesk@wavescapital.com.
Measuring the pulse of index heavy weight: BHEL
By Rishi Asrani
Feb 23, 2012 Thursday 7:30 pm
We have been able to measure each and every move on BHEL with acute precision. Markets are not moving randomly but in a predictable fashion and repeatable patterns. BHEL gave a move of more than 10% up in single day. Our readers of Financial Edge short term update were aware of the positive development in this stock. Subscribe now to see yourself similar opportunities developing in other stocks and trade the best setup in systematic way.
Write to us on helpdesk@wavescapital.com for more information.
BHEL Weekly chart:
Anticipated on 12th December 2012
Happened on 13th Jan 2012:
On 12th Dec 2011 we mentioned “On the weekly chart prices have corrected in an A-B-C –X- A-B-C formation. In our view we are currently in vth leg of the ‘C’ wave. In the near term we can expect the prices to move near the previous low & retest the lower trendline.”
On 13th Jan 2012 we mentioned “In the above chart it can be seen wave ‘v’ of the ‘C’ formation has completed near 220 levels. As anticipated the stock has rallied to 255 levels. On the daily chart prices have broken the red downtrend channel giving a positive confirmation and shall rally now. On the down side stock has immediate support near 245 levels.”
BHEL Daily chart
Anticipated on 17th Feb 2012
Happened:
On 17th Feb 2012 we mentioned “In the above weekly chart it can be seen the fall from 538-223 levels has corrected in A-B-C-X-A-B-C formation. In our view on the larger time frame currently we are in wave ‘C’ of larger degree. In the near term we expect the price to initially move towards the upper channel near 310 levels. On the daily chart we can see prices have formed an inverse head & shoulder pattern & given a positive confirmation with a break above the neckline.”
The above excerpts itself shows how we have been tracking BHEL prices as and when it was developing from lows of 230 to highs of 310...
Nifty Happened scenarios - Path Ahead:
By Ashish Kyal, CMT
Feb 22, 2012 Wednesday 6:30 pm
Below excerpts are picked up from past 3 Financial Edge short term updates and this itself proves how accurately we are measuring the pulse of Indian markets. Write to us on helpdesk@wavescapital.com if you would like to subscribe to this Daily research publication on Indian Equity market and see where we are headed from short to medium term.
Published on 3rd Jan 2012:
Nifty Daily chart: PATH AHEAD
Published on 3rd Jan 2012 before 8:30 am: We have shown Nifty path ahead on 3rd January 2012 when bearish sentiments were prevailing across the crowd. We were bullish then for a target near 5600 – 5700.
Happened as on 21st Feb 2012:
Happened: Nifty went up in this one side trend from 4600 levels and made a high of 5629 earlier than March. BANG ON!!!
Published on 21st February 2012 before 8:30 am:
Nifty Weekly chart:
Published on 21st February 2012 before 8:30 am: As shown on weekly chart of Nifty we have reached near the very strong resistance trendline since November 2009. This line acted as strong support for many months and shall now act as strong resistance (Polarity reversal)... However failure over next few days will confirm the importance of this resistance zone and we will be looking for trend exhaustion as long as 5650 – 5700 remains intact on upside.
Happened: Nifty failed to cross above the mentioned levels of 5650 and reacted steeply down on 22nd February falling more than 100 points in single trading session.
Published on 22nd February 2012 before 8:30 am:
Nifty 60 mins chart:
Published on 22nd February 2012 before 8:30 am: We believe this trend from 4685 is in its matured state and as long as 5650 – 5700 is not broken on upside we will refrain from initiating fresh long positions…BANG ON!
Happened: Selloff was seen across the sectors with blue chips like SBI, DLF, Tatasteel, etc falling more than 5% and Nifty fall by almost 2% in single day closing at 5505 from high of 5629.
Subscribe to our “Short term Financial Edge Research” to see where we are headed from here and trade objectively with strict stop loss and target levels. We have been able to capture entire move up from 4685 levels and have been out when most of the people started turning bullish. Write to us on helpdesk@wavescapital.com to subscribe NOW!
Applied Elliott wave - Ending Diagonal pattern: ABB
By Rishi Asrani
Feb 16, 2012 Thursday 1:15 pm
Elliott wave Ending Diagonals are wedge shaped patterns that offer very good trading opportunity. The below is an excerpt from Financial Edge short term update published daily before 8.30 am that shows Nifty along with 3 other stocks exhibiting such appealing opportunities. Subscribe now by writing to us on helpdesk@wavescapital.com and get the best of the trading opportunity alerts in this fast moving market.
ABB Daily chart:
Anticipated on 5th January 2012
Happened:
On 5th January we mentioned “ABB on the daily chart has formed an ending diagonal pattern. The prices have given a break on the upside & sustaining above the downtrend line. At the bottom the RSI is showing a strong positive divergence. In our view wave ‘E’ has completed near the 540 levels. In the near term we can expect an upmove to 670 -700 levels. The stock has immediate support near 565 levels. As long as 540 levels is protected on the downside we would maintain a positive stance for further upside from current levels.”
As anticipated in our previous update prices have completed the wave ‘E’ & we could see an up move that far exceeded even 700 levels. In the above chart we can see the stock has made a vertical rise after breaking the ending diagonal pattern & has retraced the entire fall of the diagonal pattern to 900 levels. The stock has given a 50% return in quick time.
Write to us on helpdesk@wavescapital.com to see what lies ahead for ABB and Indian markets.
Applied Elliott wave theory - Tatasteel
By Ashish Kyal
Feb 13, 2012 Monday
The below chart of Tatasteel shows Applied Elliott wave theory at its best. 5 waves move up was a rare event in 2011 since the entire Indian market was moving in a complex correction. Beginning of 2012 got us with impulsive up moves in few stocks. Tatasteel is one of those stocks and it exhibits what an ideal impulse wave should look like. Not only this stock has followed the 3 important rules but also most of the guidelines as well.
Tatasteel Daily chart:
Rules of Elliott wave:
a. Wave 2 cannot retrace complete of wave 1
b. Wave 3 cannot be the shortest of waves 1 and 5
c. Wave 4 cannot enter into territory of wave 1
All of these rules have been followed.
Guidelines of Elliott wave:
a. Wave 3 is usually the longest and can be 1.618 / 2.618 times of wave 1 or larger if extended
b. Wave 4 will usually form a triangle
c. Wave 3 if extended, wave 1 and wave 5 will trend towards equality
d. Wave 5 and wave 3 will usually show negative divergence which indicates loss of momentum and break of 2-4 trendline will confirm impulse 5 waves up is over and 3 waves downside correction has started.
Each of the above rules and guidelines is well observed in 60 minutes chart of Tatasteel. This is the power of Wave theory where one can predict the future action and what path prices will follow.
We have been predicting this movement as and when it was developing. This is indeed a thrilling experience. Subscribe now to our Daily research publication and see yourself what does Indian major index – Nifty is showing along with 3 stocks selected on opportunity basis. Also learn the power of Elliott wave and see how it works on realtime basis. Write to us on helpdesk@wavescapital.com for more information.
Infosys Elliott wave analysis and Results.....
By Ashish Kyal
Jan 12, 2012 Thursday 7:30 pm
Infosys result weighs on the Indian markets but Bloomberg suggests profits beat analysts’ estimates!
Below is the chart of Infosys after the results were announced. Write to us on helpdesk@wavescapital.com to get complete elliott wave analysis and what we expect from IT industry as a whole. Few wave labels and path ahead for Infy have been purposely deleted from the below chart:
Infosys Daily chart:
Infosys declared better than estimated profits as per Bloomberg but still this stock was down more than 8% in single day just based on future guidance. This is a very big fall for IT bellwether but is no surprise to us. For IT, we mentioned before on 27th December 2011 that “It is quite sometime since we covered IT bellwether TCS and Infosys. The above chart (shown on 27th December) is a Daily representation of TCS prices and it clearly indicates why we are refraining in providing any views on this stock. Prices have been moving up in overlapping formation with random movements within the channel. We also mentioned entire rally as corrective and so looking for selling opportunities”
This clearly put forwards the point what happens when wave structure suggests weakness but prices move up in overlapping formation. We believe that events do not drive stock market and can lead to only short term movements or spikes but it is the basic social mood and perception of the crowd that moves the stocks. Infosys movement after results clearly conforms to this belief.
To see what is path ahead for Infosys subscribe to our daily research publication of Indian equity markets - Short term Financial Edge. Write to us on helpdesk@wavescapital.com for more information.
Coriander (Dhaniya) Agri moved exactly as we expected...
By Anita Joshi
Jan 10, 2012 Tuesday
The Agri short term update: published on 03rd January 2012 showed Coriander chart when it moved above 4108 giving a strong breakout.
Coriander (Dhaniya) Daily chart: Anticipated on 3rd January
 Daily_3.gif "Coriander (Dhaniya) Anticipated")
Happened: on 5th January 2012
 Daily.gif "Coriander (Dhaniya)")
We mentioned on 3rd January 2012, "Coriander (Dhaniya) daily chart shows that prices have fallen hard from 6500 levels to 3800 levels within few months. We are now seeing loss of downside momentum and prices have managed to break above crucial resistance levels. We can also see a series of positive divergences at the bottom. In short, we expect Coriander to move up atleast towards 4475 levels and 4100 should act as a strong support...." BANG ON!!!
Coriander moved exactly as anticipated. Write to us on helpdesk@wavescapital.com if you would like to subscribe to our alternate day Agri short term report that presents emerging opportunities in other Agri commodities traded on NCDEX like Kapas, Pepper, Jeera, Steel, Soyabeans, Soya Oil, Chilli, Chana, etc
Silver moved exactly as anticipated just before the fall! AGAIN!!
By Ashish Kyal, CMT
Jan 04, 2012 Wednesday
The Commodity Edge published to our subscribers on 28th December warned of strong down move in Silver over short term and see yourself what happened over next 1 day!
Silver came very close to our support level of 52600 and bounced back from there. We however believe that this level shall be taken out now on the downside. The more number of times a support or resistance level is touched the more likelihood it has to be broken as the buyers or suppliers slowly dries out.
We shall start wave v down in silver which shall take prices atleast near channel support of 51000 level or lower...
Silver Anticipated on 28th December 2011
Happened on 29th December 2011
Silver fell very steeply on the same day after report was published and moved down from 52600 to 48600 - a fall of 4000 points in less than 2 days!!! The above charts need no further explanation and we cannot be more accurate in capturing Silver & Gold movements. We have done it in past and are proving that prices are non random by catching the moves Again & Again!
Nifty moved exactly as we have been anticipating, Snapshot of past 3 days!!!
By Ashish Kyal, CMT
Dec 30, 2011 Friday 7:00 pm
Below excerpts are picked up from past 3 Financial Edge short term updates and this itself proves how accurately we are measuring the pulse of Indian markets. Write to us on helpdesk@wavescapital.com if you would like to subscribe to this Daily research publication on Indian Equity market.
Published on 27th December 2011 before 8:30 am
Published on 27th December 2011 before 8:30 am, “..we now stand at crucial juncture and there are other plausible scenarios opening up since Nifty is failing to move above 4800 levels”
Happened: Nifty made a high of 4800.40 and turned immediately from there and made a low of 4724 after falling steeply from 4800 levels we had mentioned.
Published on 29th December 2011 before 8:30 am
Published on 29th December 2011 before 8:30 am, “…A break of channel increases our bias towards negative side. Below 4690 we might head towards 4630 levels.”
Happened: Nifty made a high at 4700 failed to sustain there and broke 4690 then making a low of 4639
Published on 30th December 2011 before 8:30 am
Published on 30th December 2011 before 8:30 am, “In short, during last trading day of the year 2011, it is advisable to have very less exposure on either side. Bias for the day is sideways and Nifty can move between 4620 – 4690 levels.”
Happened on 30th December 2011: Nifty made a high of 4690.45 and low of 4610, finally closing the year at 4618 (average close 4624)
Write to us on helpdesk@wavescapital.com for subscribing to The Financial Edge report and see it yourself well before market opens what Nifty and stocks are going to do for the day!
Crude uptrend driven by news event but will it last!!!
By Ashish Kyal, CMT
Dec 28, 2011 Wednesday 5:40 am
The below is an excerpt from Commodity Edge short term update report that is published on Daily basis. A few labelings are purposely deleted since it is a free section.
Crude Daily chart:
Crude Hourly chart:
Crude rallied sharply yesterday after a senior Iranian official on Tuesday delivered a sharp threat in response to economic sanctions being readied by the United States, saying his country would retaliate against any crackdown by blocking all oil shipments through the Strait of Hormuz, a vital artery for transporting about one-fifth of the world’s oil supply. Crude immediately started going up and came very close to previous top of 5392 level.
We still continue to believe that we are in wave ? formation but the short term trend continues to be up. Wave ? in case of flats can exceed start of wave ? and can extend even further. The magnitude of the upward correction is always difficult to forecast and time wise this wave shall usually take more time to develop. This is what has happened here as well.
To read where crude is headed from here and if news is really driving crude prices higher write to us on helpdesk@wavescapital.com for subscribing to our Commodity Daily publication..
Hindalco "BLUE PRINT"
By Ashish Kyal, CMT
Dec 27, 2011 Tuesday 5:00 pm
The below chart was published in Financial Edge Short term update, a Daily publication of Indian market. A few of the labelings have been purposely removed. Write to us on helpdesk@wavescapital.com if you would like to subscribe.
Hindalco Daily chart:
(CLICK TO ENLARGE)
On the daily chart we can see an amazing scenario developing in Hindalco prices based on the study of Time cycles & Fibonacci relationship. The stock has retraced 61.8% of the entire upmove from 37 -250 levels.
Prices have corrected 55% from the highs of 250 levels in 233 days both 55 and 233 are Fibonacci numbers. Also the drop in value terms has been 140 (Fibo 144) and average per day fall is 0.60 (Golden ratio – 0.618). All this simply signifies the importance of Fibonacci series in stock markets. This also indicates the low formed at 113 is an important low and odds increases that this low shall be respected atleast for few weeks.
In our view the entire upmove from 2009 lows has rallied in an A-B-C formation. On the larger time frame we have shown the 328 days cycle and 82 period cycle. Both cycle has formed the bottom in first week of November thereby indicating that an uptrend can last till February 2012.
To get the short term and medium term price targets with crucial risk management levels write to us on helpdesk@wavescapital.com
USDINR moved exactly as anticipated six months back!
By Ashish Kyal, CMT
Dec 07, 2011 Wednesday 4:15 pm
Anticipated on 16th May 2011: This chart was published in our Currency short term update during times of extreme optimism towards Rupee outperformance to USD but we were expecting a move up towards 52.
USDINR Weekly chart:
 Happened:
We mentioned before on 16th May 2011, “The weekly chart of USDINR shown above is picked up from our currency report publication where our currency analysts predicts movement of Indian Rupee against various currencies like USD, GBP, JPY & Euro. Looking at those charts and USDINR above it is mentioned that there can be some serious depreciation in Indian Rupee against USD. We can clearly see the Elliott wave markings on the chart and prices have formed Triple bottom at exactly 61.8% retracement of rally from 39 to 52 levels. The downward move is also overlapping and we can see a strong positive RSI divergence on weekly scale.
All this indicates USDINR should now start moving up and break the downward trendline. A break above 45.10 will provide strong confirmation that we might have ended multi-month down move on USDINR.
This also sends across bearish picture for Indian equities. We do concur that currency and equities do not move in lock step but the correlation does increases at major turning points.”
Currently USDINR has completed 5 waves up from the bottom at 44 to 52 levels and shall now correct the entire up move. However we might have completed just wave i of 5 and are in wave ii of 5. Either ways the short term trend points downwards. Subscribe to Forex alternate day report to see where current wave is headed or write to us on helpdesk@wavescapital.com
Copper moved exactly as anticipated:
By Vishal Dalvi
Dec 01,2011 Thursday 4:00 pm
Commodity short term update published in morning at 8:30 am on 30th November 2011 precisely predicted the violent move of copper which happened yesterday evening.
Copper Daily chart:
Anticipated on 30th December
Happened:
Copper 60 minutes chart:
Anticipated on 30th December
Happened:
We mentioned yesterday “ Prices did nothing but traded sideways yesterday which suggests the wave 2 in ongoing currently and we need to wait patiently till this correction gets over and enter again for the steep wave 3 rally on the upside. Wave 2 can consolidate and drag between the range of 380-385 levels. A break above the high of wave 1, which is 390, should give a confirmation of the start of wave 3 which should target 410-415.”
BANG ON TARGET!!!!
We could not have been more accurate in forecasting the steep rally in Copper yesterday. Wave 2 consolidated for the first half yesterday and retraced exactly at the 61.8% retracement of wave 1. Prices just took off from there, broke the high of wave 1 at 390 and rallied exactly to our mentioned levels of 410-415 (Nov contract). Prices made a high of 416.70 yesterday.
If you would like to know and see on charts yourself what is next for Copper please write to us on helpdesk@wavescapital.com
Tatamotors / Tatamotors DVR ratio following Time Cycles:
By Ashish Kyal, CMT
Nov 30, 2011 Wednesday 7:00 pm
Pair trading short term report published this chart on how well a pair can be created even by using highly correlated stocks like Tatamotors along with its DVR.
Tatamotors - Tatamotors DVR Daily chart:
Tatamotors / Tatamotors DVR Ratio chart: DOWN
Anticipated on 14th November
Happened:
Tatamotors – Tatamotors DVR Difference chart:
Anticipated on 14th November:
Happened:
Ratio Analysis:
We previously mentioned on 14th November, “The second chart is a ratio chart that shows that Tatamotors outperformance to its DVR is at all time high and is moving in an upward blue channel. However, within this channel we can see period of outperformance and underperformance. Ratio ROC along with channeling techniques are giving very clear buy sell signals. We can observe that currently the ratio is at upper end of the channel and the Rate of Change (ROC) indicator is also hitting the resistance area. This means we should have the performance cycle reversed soon favoring outperformance of Tatamotors DVR against its normal stock. To confirm this analysis we went down a step further to carry out a value based difference between prices of the two stocks.
The third chart shows that we should start a period of convergence and price difference between 2 stocks should reduce. Also we can observe a very clear 79 days cycle being followed and a subtle shift in cycle from right translation to centered to left translation. Translation in cycles are defined based on peaks that occur between 2 cycle lows. If the peak is on the right side of mid portion of cycle it is right translated and that indicates strength where uptrend is for more time than downtrend within that period. A change in the translation from above chart indicates that we have entered a period where downtrend is taking more time than up trend and so difference between 2 stocks should reduce atleast till start of 2012. This strongly indicates buying the undervalued stock (TatamotorsDVR) and selling of overvalued stock (Tatamotors) to take advantage of the difference cycle.
In short, the Daily chart, Ratio chart and Difference chart are all suggesting that performance cycle should now favor Tatamotors DVR and the stock should outperform its normal stock over coming weeks.” BANG ON!!!
Tatamotors / Tatamotors DVR ratio chart clearly shows the ratio moved down quickly within 2 week as we anticipated. Even the price ROC indicator moved exactly as we have highlighted. Currently we can see that price ROC is near the lower trendline. We still have little room for it to move down but the best of the down move in the ratio might be over for short term. We might now have a period of consolidation after sometime in ratio when ROC touches the -5 level currently it is near 0. The medium term trend however remains down till we reach near 1.70 levels.
Tatamotors – Tatamotors DVR difference chart is also showing how well the value chart has worked in our favor. 79 days cycle is still intact and the difference in value between the two stocks shall continue.
In short, the ratio shall continue to drift lower for a week but a phase of consolidation might start soon i.e. Tatamotors should continue to underperform Tatamotors DVR but we can start consolidating to relieve ROC levels. The medium term trend remains down and the difference in value between 2 stocks shall continue to reduce until cycle lows are reached in Jan 2012!
Will Nifty follow the 6 to 7 days rally pattern?
By Ashish Kyal, CMT
Nov 29, 2011 Tuesday 3:00 pm
The Financial Edge daily report published this Nifty Cycle chart today morning at 8:30 am
Nifty Daily chart:
Nifty 10 mins chart:
Nifty had a big Gap up opening yesterday following the oversold state. We have been expecting positive move up since past 3 days when the break of 4720 turned the last set of bulls into bears. But we had our indicators and wave analysis in place that helped us to predict the turn up again which would have come as a surprise to many!
Nifty daily chart shows a big blue candle out of the downward channel. The trend over short term has changed towards up.
However a close observation of the above Daily chart reveals a very important fact that in all prior instances (since the fall started in November 2010), after every steep move down Nifty rallied fiercely up for 6 to 7 days and ended that rally with a spike. It then turned down on the 7th day taking back prices to where it started matching the momentum of uptrend. The magnitude of rally has ended between 38.2% - 50% on prior occasions. If the similar pattern and cycle has to continue we will rally for 4 more days (2 days of rally is complete) till 4940 levels and should turn down from there with a spike.
Time will tell if this short term cycle is still intact! In short, the trend remains positive for this week and strong resistance comes into play around 4920 – 4940 levels.
Silver fall Predicted exactly 24 hours before..By Ashish Kyal, CMT
Nov 19, 2011 Saturday 1:00 pmThe Commodity Edge Short term update: The following excerpt is picked up from the short term update we publish on daily basis. We published this chart to our International commodity report subscribers on 17th November 2011. Silver anticipated on 17th Nov 2011 00:30 IST (before 24 hours) Silver Happened 18th Nov 2011 00:45 am (after 24 hours)
Chart Courtesy: Netdania
Silver fall of more than Rs. 3000 was predicted exactly 24 hours prior it happened in the short term update report of Waves Capital. We published this chart to our International commodity report subscribers on 17th November 2011 morning and the snapshot of the chart was taken at 00:30. The above second chart snapshot was taken on 18th Nov 00:45, exactly after 24 hours. The charts need no explanation and even the low marked exactly after 24 hours was at $ 31 as forecasted in first chart by red line. It is simply a thrilling experience and wanted to share across with our readers!
Subscribe today to our Short term updates and see it yourself how predictably and systematically the world is moving! Write to us on helpdesk@wavescapital.com to get "free research trial".
Trading the waves using Channeling technique: Indian Markets Nifty...
By Ashish Kyal, CMT
Nov 16, 2011 Wednesday 3:45 pm
The Financial Edge STU: The following is an excerpt from our Daily Equity publication - a product covering 3 equity stocks based on opportunities along with Nifty / Sensex view and what we expect during the day. The below was published on 15th Nov 2011 morning 8.30 am before market opened.
Nifty 10 minutes:
Nifty 30 minutes:
Nifty Daily:
Nifty 10 minutes chart shows very simple channeling technique that can be used for trading. Channels are parallel lines drawn taking the highs and the lows. We have observed that using even a simple technique like channeling can provide amazing trading opportunities. As shown on 10 mins, 30 mins and Daily charts we can clearly observe each leg has been moving in channel across the time scales.
As we have mentioned in our previous report “Nifty daily chart shows a doji formation which indicates indecisiveness. Given the rally in US and European markets on Friday it will be crucial to observe how our markets react to this and if we manage to open gap up & whether we will be able to sustain there during the day. A failure to sustain above 5150 levels will break the strong support zone and will confirm next leg down towards 4800 and lower has started.”
Nifty is failing to sustain the rally and did not even manage to challenge the opening gap up near 5230. This indicates weakness and as we have mentioned before, Nifty closed below 5150 yesterday. We are now bearish on Indian markets as long as 5220 – 5250 levels are intact on upside which will otherwise indicate that we are moving in a red corrective channel shown on 30 minutes chart.
A move below 5070 will increase the selling in Indian markets and will confirm that we are headed towards 4800.
In short, the trend for Nifty is down and 5220 – 5250 should be used as Risk management level.
Trading Elliott Waves: Lead Futures realtime chart
By Ashish Kyal, CMT
Nov 02, 2011 Wednesday 4:15 pm
The below Lead chart is an ideal chart that represents how one see Elliott wave can work in real time. It is the best example and replicates text book charts. It not only obeys all the rules of Elliott wave but also follows each and every guideline. A real time example of this precision just shows markets whether commodity or currency follows a path which is predictable by using technical tools like Elliott wave. The astonishing fact is it is a “5 minutes chart”. Simply unbelievable to a person who is new in this field but for us it has happened in the past and this will repeat in future on different time scales from 5 minutes to hourly to daily to weekly, etc.
Lead Futures chart: 5 minutes
(Click to Enlarge)
In the above chart a Buy confirmation is obtained as soon as Lead prices break above the downward sloping red channel. 5th wave of previous downfall gave a strong positive divergence along with RSI. This provides further confirmation. Also the previous down leg is retraced faster than it took to form. This gives a perfect setup to enter into long lead position at 91.10 levels.
After that each and every waves had moved as expected. Minute wave (iii) is exactly 1.618 * wave (i). When wave 3rd is extended wave v usually tends towards equality and the above chart shows this exact relation to the decimal for both the cases. Even channeling technique has been working perfectly accurate and 2-4 trendline was broken only at 99.50 thereby providing confirmation that 5 waves up are over and a period of correction has started.
Even by following very simple 3 rules of Elliott wave i.e. a. Wave ii cannot retrace complete of wave i, b. Wave iii cannot be the shortest among all the waves and c. Wave iv cannot enter into territory of wave i
Markets are fractal and we have a live example of Elliott wave working on real time chart on 5 minutes. This just confirms validity of theory and is the best example that shows how to trade markets using Elliott waves. Fractal nature implies if something works on smaller time frames, bound to work on bigger time frames from hourly to daily to weekly, etc. Relish the world of Wave Theory!
Sensex reached near 18000 exactly as Anticipated!!!
By Ashish Kyal, CMT
Nov 01, 2011 Tuesday 3:45 pm
The first chart shown below was shown in our Financial Edge Short term Update on 14th October. We have been very accurate in forecasting the Sensex path along with Price and Time. We published the second chart today morning at 8:30 am before market opened.
Bottom Line: Sensex reached near 18000 in 15 days exactly as we were anticipating! Time Cycles cannot be more accurate than this…
ANTICIPATED ON 14TH OCT:
Happened:
(Click to Enlarge)
Sensex: Time Cycles
We mentioned previously on 14th October, “Everything is so systematic that it cannot be controlled or manipulated but humans by default exhibits this natural phenomenon and makes prices move within channel, following 15 days rally, that retraces 76.4% of fall, with each down leg having 3 waves, and each 3rd wave forming positive divergences!!!
If the same systematic approach continues the current rally is only in its 6th day with approximately 9 more days to go and current up leg should also retrace 76.4% of previous down leg taking it near 18000 to 18300 levels which is also the upper end of the channel, 23.6% level of retracement level of entire rally since bottom of October 2008 (now act as resistance) and resistance line coming in from November 2009 lows (shown on 1st chart). All these precisely converge together at 18000 – 18300 levels and this should be touched on 26th October ( +/- 3 days).” Simply PERFECT!!!
On 26th October, Indian equity markets were open for only 1.15 hour on account of Muharat trading and 27th October was holiday. So ideally 28th October becomes likely date for 18000 levels and index opened with a huge gap of almost 400 points that day making a high of 17908. This is in perfect sync with the symmetry we have observed.
It is now imperative to observe how Sensex reacts from current levels. A sideways consolidation forming a rounding type pattern has been seen during previous tops near the downward sloping trendline and so we can expect a similar sideways consolidation near 17900 – 18300 levels before the down leg starts!
Gold moved exactly as Anticipated & moved down from the wedge structure...
By Vishal Dalvi
Oct 19, 2011 Wednesday 4:00 pm
The Commodity Edge STU: We mentioned in our Short term update (STU) on Oct 17th what is expected out of Gold and gave the path ahead. GOLD is on track of this path exactly as we expect. The Commodity Edge is an alternate day publication that gives short term to medium term perspective on what can be probable movements of Gold, Silver, Base metals, Energy, etc
MCX Gold: Daily chart, Anticipated on 17th October
Happened:
In our report on 17th Oct, we said “Prices are still trading below 27147 and consolidating in the triangle and about to give a break on the downside. A break of the triangle formation on the downside would confirm the completion of wave ‘X’ and the start of the next leg down. When the prices were falling, we can see that the volumes were increasing, which favors the downtrend. Also, we can see that the volume was decreasing while consolidated triangle was being formed, which questions the current up move and increases the odds against a fall now.”
Prices have given a breakdown as expected yesterday. In our last report we spoke about volume reduction on price rise. Yesterday we saw a breakdown with an increase in volumes and confirm our bearish stance on Gold.
In the late evening session, we saw a surprising price recovery from the day’s lows, which warns for a caution approach towards aggressive selling in Gold. Volatility would be high and moves will be fierce on both the sides.
Expect a gap up opening followed by a subdued action for the day and some correction in the late evening for the day.
Resistance would be seen around 26740 levels while support could be seen around 26455 followed by 26290. A fall below 26250 would invite for further correction towards 25819.
Sensex Time Cycles at its best, Sensex Blue Print!!!
By Ashish Kyal, CMT
Oct 14, 2011 Friday 7:00 pm
The Financial Edge STU: The following is an excerpt from our Daily Equity publication - a product covering 3 equity stocks based on opportunities along with Nifty / Sensex view and what we expect during the day.
Sensex Daily chart: Previously mentioned on 25th July 2011
Happened: Low formed exactly in October 1st week Sensex 69 days Time cycles was first shown on 25th July 2011 in our Financial Edge report. The cycle low at that time was marked on 5th October 2011. When we revisited this chart with updated data it was a thrilling experience to see a low precisely made on 5th October 2011 at 15760. The very next trading day Sensex opened Gap up at 16222, a gap up opening of more than 450 points. Time cycles cannot work more precisely than this one.
This is a real challenge to the critics and who believes Indian markets are manipulated and controlled by few large players having insider information. If that is the case the question to ask is, Is there a Blue print laid out which shows that every 69th day a bottom should be formed in Indian markets that give rise to a rally for atleast 15 days?? Every cycle bottom resulted in a rally that lasted on an average 15 days.
Apart from that the each rally retraced the previous leg by exact 76.4% retracement i.e. the next leg of rally after the fall moved up 76.4% of downfall.
Each down move was also extremely systematic. Every down leg had 3 sub waves to it, in which the 3rd down wave came very close to the 1st down wave (marginally above / below) and also each 3rd wave was associated with strong positive divergences.
Sensex is also moving within the down channel very systematically. Every time this channel is touched prices reverses, up from lower trendline of channel and down from upper trendline of channel.
Everything is so systematic that it cannot be controlled or manipulated but humans by default exhibits this natural phenomenon and makes prices move within channel, following 15 days rally, that retraces 76.4% of fall, with each down leg having 3 waves, and each 3rd wave forming positive divergences!!!
If the same systematic approach continues the current rally is only in its 6th day with approximately 9 more days to go and current up leg should also retrace 76.4% of previous down leg taking it near 18000 to 18300 levels which is also the upper end of the channel, 23.6% level of retracement level of entire rally since bottom of October 2008 (now act as resistance) and resistance line coming in from November 2009 lows (shown on 1st chart). All these precisely converge together at 18000 – 18300 levels and this should be touched on 26th October ( +/- 3 days).
Caution: Cycles are good as long as it works and there are no prior indications for a cycle to stop working. We are assuming the current 15 days rally cycle and 69 days bigger cycle is intact. Please understand Time remains the most difficult aspect in forecasting and Risk management remains extremely crucial even if we have a high probability setup with n number of studies indicating the same thing.
Remembering Steve Jobs - Apple!
By Ashish Kyal, CMT
Oct 10, 2011 Monday 6:30 pmRemembering Steve Jobs (1955 – 2011):Apple website states “Apple has lost a visionary and creative genius, and the world has lost an amazing human being. Those of us who have been fortunate enough to know and work with Steve have lost a dear friend and an inspiring mentor. Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple.”Apple Weekly chart: Chart courtesy NetdaniaWe did not have the opportunity to know Steve Jobs closely but his product and stock price speaks for everything he has done for Apple. He indeed was a great visionary and innovator and revolutionized technology the way we see it today. World has lost a great thinker and Apple has lost the most precious asset to the company.
Apple weekly chart shows how Steve Jobs created true value for its shareholders. The stock was trading below $ 10 in 2004 and hit all time high at 422 just 2 weeks prior to Steve Job’s exit from the world.
Time will tell if Apple is able to manage without the great genius and progress the way it has in past six to seven years.
However Elliott analysis on Apple’s stock price and technical study are suggesting at least some consolidation or pull back (down) might be at hand from medium term perspective. Apple stock has moved in a well defined channel since 2009 with wave 1 extended as shown on the weekly chart. Wave counts are suggesting we have completed 5 waves up and there exists strong negative divergence. A move below 340 will provide first negative confirmation and the correction of the entire rally from 75 to 420 will then start.
This means the new CEO might face tough times convincing its shareholders that he can do the job well and with same dynamism / commitment that Steve entrusted him with. The long term trend remains intact - up for now but Apple might face challenging times from short to medium term horizon.
Pair Trading Strategy: Sunpharma / Cipla
By Rishi Asrani
Oct 05, 2011 Wednesday
Bottom line: Ratio or Pair trading provides excellent opportunities during challenging and non trending environment. The below is a part of the strategy published from our alternate day Pair trading report that provides strategies across similar sectors / stocks:
SUN PHARMA/ CIPLA Daily Ratio: Short
Anticipated on 26th September 2011
Happened on 04th October 2011:
As mentioned on 26th September “The above chart is a ratio chart of Sun Pharma prices divided by Cipla. We can see that the relative strength chart has formed a head & shoulder pattern and the ratio has broken the neckline. A sustain below the 1.68 level will drift the ratio lower to 1.54 levels. On the upside the ratio should find resistance around the 1.74 levels. On the Bollinger bands the ratio has gone below the center band & in the near term we expect the ratio to move atleast towards the lower band. In our view we expect Sun Pharma to underperform Cipla in the near term”.
As expected the ratio has corrected from 1.66 levels to 1.60 levels. On the daily chart we had mentioned two target levels & expected the ratio to atleast test the lower band around the 1.60 levels & it has performed in line to our expectation. In the near term the ratio is oversold on the Bollinger band & we can expect a pullback in the short term. At higher levels around 1.65 we expect the ratio to find resistance & turn down again from there. We would still stick to our view & expect Sun Pharma to underperform Cipla but we remain cautious that some pull back is plausible over short term.
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