Thursday, November 29, 2012

Possible Trade Ideas for Tomorrow

Flag in DLF, suggests more upside. May be a half mast pattern, the move preceding the flag should follow, tgt around 215.
HnS in Maruti, NL broken, even retested, possible target 1455.
Possible F pattern in Tatamotors, we may see up move if we breakout, from the consolidation.

Sunday, November 18, 2012

Dollar Index - Elliott Wave Analysis

The weekly chart of DI seems to forming a triangle in wave {B}. We may be in the last leg of wave {B}. Wave E of {B} seems to be forming a double three correction. I feel there is more upside left before we call an end to this wave E of {B}. The detailed count is shown below, on daily fractal.
This chart shows the labeling in detail of this last advance in wave E of {B}. We can see RSI is treading strong, and has crossed the 65 level mark, this suggests the trend is strong, and any pullback would most likely be bought into. Also there is no long term bearish divergence forming yet on both Weekly and Daily fractals, that again should add credibility to further strength in DI. Though my use of a single indicator here may seem insufficient, but two other popular indicators Stochastics and MACD (not shown here) too tell the same story.
Now I may be wrong, and DI may turn down, or I may be more wrong and DI just breaks out into the much anticipated "deflationary depressionary" rally and invalidates the bearish triangle pattern. But my analysis tells me to expect more price action before calling an end to this triangle pattern.
As a safety measure I would say, if DI trades below 79.65 then this wave E can be deemed complete. But above that level there is always a chance of further upside.
Ideally I would love to see a flat pattern in wave [y] of E of {B}, as that would mean a progressive loss of strength in the rally, and a corresponding built up of strength of the decline that may follow post completion of this triangle pattern. Even a failure of wave (c) of [y] of E of {B} is welcome, but we need a clear 5 wave move that fails to take out the wave (a) top, to confirm this count.

Note: Neither Neowave nor Classical EW is endorsed here in particular, I use both of them together, much to the dismay of ardent followers of either of the theories. I was a classical EW follower first, but was compelled to study Neowave by fantastic analysis by a fellow trader. But now I am stuck in between, and actually liking it. You get best of both the worlds, better risk management, what else do we traders need. But for analysts its a different story altogether, and I can't and won't fight them, so my dear analyst friends please don't bother. But if my trader friends want to add something they are more than welcome here.
Though this website is about trading, I am not offering any trading advice, this blog is to share my ideas with like minded people.

Saturday, November 17, 2012

USDINR, Nifty - Elliott Wave Analysis

A monthly and weekly fractal charts are attached above for USDINR. Let me make it clear in the beginning, that the EW counts on the charts are not permanent, they are subject to change and are the best I could manage at this moment. Taking it further, I believe we may not have finished the advance that begun in mid 2011. I can see a "rising wedge" type of pattern developing, and we may need another new high before we can think about the completion of this pattern. My guess is we may find resistance around 57.35 range. One caveat though, if we reach the 57.35 level, and reach there in relatively short time span, the technical position need to be checked before making an opinion about the future direction of the markets. Right now momentum indicators are waning with each new high. That should alert us, while expecting more upside in this counter, but there have been instances of multiple divergences and even multiple divergences failing. So stay with the trend till there are clear signs of revealing.

Today, I am proposing a radically bearish count, for Nifty. There is a chance of a wave [5] of wave {B}having failed. Once again, the counts are subject to change, one must constantly measure the technical strength of the moves to keep a tab of developments in the markets. But if the wave [5] failure gets confirmed, we could start our way down on wave {C}, and the consequences need not be explained to an Elliottician. We can see that the momentum indicators are diverging and that is never a good sign. The overall structure of the momentum indicators is not in favor of a long term advance, the technical structure for the whole up move of 2012 is akin to a "bear market bounce" at best. If some critical supports are broken on the downside, we may see the down move accelerating.
On the shorter term though, what is important is to try and anticipate where this current fall, may find support, so that a bounce develops, and we can better position ourselves for a deeper cut, presuming our wave [5] scenario plays out. There is an important gap area at 5530-5455, we need to monitor how prices behave around this level to get a clue about future developments in Nifty.

Note: I don't mind criticism as long as it is constructive. I can't predict the future, neither do I want to, I follow my trading system, and try to share what I have gleaned with those who find it useful to listen my views. Please forget what I have written if you don't find it useful, after all we have all read newspapers (much worse financial media) at some point in time in our life.

Saturday, November 10, 2012

Gold, Nifty, Banknifty - Technical Analysis

Nifty Daily
Nifty correction may extend, if we break below the support zone of 5700-5680. The fall may extend to 5595, and even further (less likely) to 5535.
Banknifty Daily
Banknifty seems to be forming a flat correction. Support may come around 11200-11070 levels. But one should be watchful of 5700-5680 levels on Nifty. If that support holds, Banknifty may not reach its target levels.
Gold Daily
Gold has staged a smart rally. But I am not completely sure that we have embarked on a new uptrend. The price area between 31900-31740 is crucial. If we sustain above this band we may, start the rally. But getting resisted at these levels is not a good sign, at least in the short term. In that case, the correction may extend down.
Gold Monthly
The monthly chart of gold shows a typical pattern. The first set of diverging blue line, on volume and price ranges from mid 2010 to mid 2011. We can see that prices moved up and volume decreased. Contrary to popular wisdom, that rising prices and falling volume is bearish, prices exploded soon afterwards. Now the second set of diverging blue lines, ranging from late 2011 till date. Here too we have a rising price structure in conjunction with falling volume. Not sure what will follow. But if the old pattern is recurring, then a break above the resistance zone identified earlier around 31740-31900, may repeat history.

Thanks a lot for your precious time!

Wednesday, November 7, 2012

USDINR - Elliott Wave Analysis

This is a weekly chart of USDINR. The count suggests that we should now come down in wave (D). The possible target would be in the 49 range. Please be mindful of the fact that this is a weekly fractal, and correspondingly take much more time to complete.

This daily chart shows the developing wave (D) id detail. We may be forming a {W}-{X}-{Y} correction. Lets see where prices take us. Presently prices are facing resistance in the 55-55.25 zone.

Nifty - Elliott Wave Analysis

Monthly chart suggests, we are in wave C of {B} of (C). We may have some more upside left to complete this wave C. Once this is done we may expect wave {C} down.
The weekly chart shows the internals of wave {B} in detail. We have an extended wave [3] of C of {B}. The price may find resistance at the parallel lines drawn on the chart.
We can see the details of the extending wave [3] in this daily chart. Waves are developing beautifully. We need to make a new high above wave (3) to complete wave (5) and then a 3 wave consolidation to complete wave [4] and ten last dash up to get the wave [5] over with. That should complete wave C of {B}, and then we can anticipate a 5 wave decline in wave {C}.

Note: This is a big picture forecast of Nifty. This should be used for analysis purpose, and not to trade. The idea is to integrate your trading system with long term EW counts to help you take decisive action at critical junctures. Labels with "?" behind them suggest the count is not complete yet. (Futures charts are used.)