Brace for a Volatile and Weak Nifty !!

Nifty will do well to protect the all important level of 10,000 tomorrow post state election results, a poor performance of BJP in poll bound states will give direction to market as we approach the 2019 elections.

Looks like an imminent bearish pattern , the H&S neckline on the weekly charts is placed at 10,000 and a breakdown below, could open up target of 8260 for Nifty in the coming months.

Nifty Weekly

On the monthly charts looks like we are in the midst Wave 4 after completing Wave 3 which ended at 11,760. Read in conjunction with the H&S target the target for Wave 4 indicate a possibility of Nifty heading towards 8200 levels.

Nifty Monthly

Watch the Magic of SBA !!

Synchronized Bullish Alignment (SBA),  an unidirectional alignment of trends is the best pattern which can give the maximum return in the shortest possible trading time frame. The  trends position themselves in such a way that no single trends is running contrary to the main  trend, and thus propel the security price in an impulsive move.

The pattern can be identified well in advance and a trade position can be initiated to take advantage of the impulse move.

Here are the charts showing the SBA+ pattern which have given stellar  returns  in July :

How to Trade Momentum with TTO ?

 The color coded twin lines on TTO changing colors to give buy and sell trades.

 Positive momentum (Blue - Buy) and negative momentum (Pink- Sell) correspond with the trigger (yellow dotted line) crossing the zero.

Any change in momentum is indicated by the trigger line moving towards zero - Time to book profit !!

How the Nifty Top Was Predicted ??

The series of tweets which tracked tracked Nifty to its top :

The earliest indication of a market top were available on  December 19, 2017 with a forced index movement towards 11,000 with declining trend momentum on TTO. 

On January 11, 2018 the bulls were still trying hard to move the index to 11,000 but market was already indicating tiredness as the up move was accompanied by declining A/D ratio as  Nifty also reached the multi year  upper trend line.

Nifty reached its inverse head & shoulder target of 11,000 with highly stretched technical indicators, a reversal was on cards. Momentum carried Nifty to 11,171 but the market was only looking for a trigger.

The trigger came in the form of budget which was though not entirely disappointing, but was reason enough to initiate a long awaited correction.

 A simultaneous development of better than anticipated job growth triggered fears of a high growth rate in the US and  resultant high interest rate with improved bond yield triggered a collapse on DOW.

You don't always need bad news for market corrections !!

The market dynamics have changed from buy on dips to sell on rallies as a major top has been created on Nifty at 11,171.

Are Oil Bulls Back in Business ??

#Brent Crude hit a more than three-year high on Thursday, breaking through the psychologically important $70 a barrel level for the first time since December 2014

Oil prices have been supported by stronger-than-expected demand fueled by the US recovery, worldwide economic growth on one side,  supply cuts by OPEC and Russia on the other and a series of global events that have stroked geopolitical tension.

There are a number of factors that could push oil prices higher, including supply disruptions from Iran, which faces the threat of renewed U.S. sanctions, and Venezuela, where economic crisis may hamper its ability to pump oil.

Brent  surpassed the technical target of $67 and trading at the resistance zone of around $70. A  small correction to $64 may be around the corner.

Brent Crude Daily

 A close above $70 changes the long term parameters to bullish with targets of $90-92,  backed by strong momentum as also the target for inverse head and shoulder pattern.

Brent Crude Monthly

There is strong momentum reversal with yearly trend momentum threatening to cross above zero, oil bulls may soon  be back in business. 

Brent Crude Yearly