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

NIFTY : Top at 11,000 and A Corrective 2018 ??

The Indian indices has given excellent returns during the last two years.

Nifty has moved from 6825 to 8555 during 2016 and from 7893 to 10443 during 2017 giving an absolute  return of  25% and 32% respectively. With an inverse head and shoulder target of 11,000 on monthly charts, Nifty is likely to top out by March 2018 and begin a corrective phase which is may last the entire 2018 and probably 2019 till the outcome of the general elections.

The monthly chart of Nifty indicate  a slowing momentum which is likely to cross over to negative zone marking the beginning of corrective phase in Nifty. The placement of trend oscillator is identical to  2015, which triggered a year long correction.

The correction may also coincide  with a populist budget the government may present a year ahead of the elections in 2019 and compromise on the fiscal discipline.

Nifty Monthly

What is India VIX indicating ??

VIX (Volatility Index) generally have a negative correlation to the underlying stock/index i.e. higher the VIX, greater is the possibility of a correction and deeper will be correction.

The TTO of India VIX (monthly)  has  been hovering around zero since 2014. Though, there have been intermittent  spikes which have played out by way of minor corrections on the Nifty.

Here is what the long term trend of India VIX captured  on TTO looks like, with the long term  trends now firmly trending in bearish territory and the recent correction indicated by a spike in the trend trigger.

With long term India VIX indicating a bearish bias, will the negative correlation hold out for Nifty??

India VIX (Monthly)

Nifty May Retrace To 8900 !!

Nifty has retraced 400 points in the last 10 days, since the top it made on August 2 at 10130. The geo-political developments are likely to stretch for a few months till things sort out themselves. In any case, Nifty was running ahead of parameters, both technical and fundamental and required a bit of cooling down.

This probably marks the beginning of long awaited major correction for an up move which started in January 2017, taking Nifty from 8,000 to 10,100 a staggering 25%  in about 7 months, an astonishing 50% annualized return by the indices.

The Nifty is likely to retrace to 8900-9000 levels, which would be a 50%  pullback of the entire up move since the beginning of the rally which is likely to last three months till October 2017. Though, there are two major support levels at 9700 and 9250 but it remains to be seen if they can hold for Nifty to make a reversal.

Here, is the visual summary of short trade on Nifty from 10100 levels which has already given handsome  profit for the short traders.

Apple : Time To Book Profit ??

It has been a good run on Apple since the last buy signal @95 on monthly.

The trend trigger has been losing momentum, while the price touches the  upper trend line.

Much of the rise has been on thinning volumes, is it time to book profit ??

Apple Monthly

Trend Transition and SBA

Example of Trend Transition (Crossover) and Synchronized Bullish/ Bearish Alignment (SBA) . Create  trading positions  in advance using trend transition and  SBA  to capture trending moves  (large profit with short trade) especially playing naked option positions.

Nifty Could Be Heading to 11,000 !!

Having overcome the resistance at 8990 with a gap up, Nifty is now trading close to 9150.

On the weekly charts, Nifty has formed inverse H&S pattern with neckline at 9085, sustaining above which Nifty is all set to climb higher levels with a target of 11,000.

The target may be achieved by March 2018,  approx 12 months from now. This is the time Nifty has taken from its lows (Head) in March 2016 till it achieved the breakout above the neckline.

Super Rally on DOW !!

The Dow Jones industrial average just jumped 1,000 points in 24 trading days, vying for one of the fastest jumps on record.

If the Dow closes above 21,000 on Wednesday, that ties it with the index's run in 1999, when the Dow climbed from 10,000 to 11,000 in 24 trading days, according to Ryan Detrick, senior market strategist at LPL Financial.

The 1,000-point moves become less impressive on a percentage basis, however.

The Dow climbed 10 percent in 1999, while it's risen only 5 percent in the move from 20,000 to 21,000.

Read the full article ....

http://www.cnbc.com/2017/03/01/dow-21000-may-tie-as-shortest-1000-point-jump-ever.html

Super Rally to Unfold on Dow ??

Synchronized  Bullish Alignment on DJIA !!

The trend oscillators across three time frames are aligned in a rare  bullish mode on DJIA which could result in super rally  unfolding  in the next few weeks,  taking Dow to dizzy highs.

As the trigger (yellow dotted) line positions itself to cross the zero, a buy signal is generated on Triple Trend Oscillator. The long term trend oscillator is above zero and rising indicating a bullish outlook in the next few months.

Irrespective of Trump policies, Dow is all set to scale new highs which will have positive implications for world markets.

Dow Weekly

Update March 2, 2017 :

Super Rally On DOW !!!

25 days and a 5% rally (from 20090 to 21115) on #DOW, predictive analysis based on Triple Trend Oscillator.

Dow Weekly

What popular indicators predicted for DOW on February 8, 2017 ??

Nifty Poised for a Breakout ??

Elliott Wave Update for Nifty

Nifty Poised for US Elections ??

Nifty has been in a consolidation mode since the last month and a half, making a higher base at 8550, a level which assumes significance due to the number of times it has been tested over the previous three months.

Nifty may continue to find strong support at around 8550 which may act as a make or break pivot for Nifty.

With US elections a few weeks away, the  TO on Triple Trend Oscillator are aligned identically as they were just a few weeks before the Indian elections during 2014.

Both, the long and medium TO are placed above zero indicating a bullish bias. The short TO however is showing weakness in the near term which is reflected by the corrective phase of Nifty being witnessed now.

It remains to be seen if the indices will witness a breakout post the outcome of US elections, as it did post Indian elections.

The Elliott wave count may  suggest wave 5 of 3 fell short of its target of 9110 to end 8960 and  we may be witnessing wave 4 correction.  The impending wave 5 continues to have higher target of 9840, we may see during 2017.
See post  : http://eqtrend.blogspot.in/2016/08/elliott-wave-targets-for-nifty-9840.html

Nifty Weekly

Elliott Wave Targets for Nifty : 9840 ??

Nifty completed  sub wave  5-3-4 with a triangle (a-b-c-d-e)  to start   wave 5-3-5. Typical of wave 4, the price pierced the trend line momentarily and reversed to start the new wave.

The major wave 5 is likely to have an extended wave count of 1-2-1-2-3-4-5-4-5.

Based on the principal of wave equality the present wave 5-3-5 is likely to have a target of 9110 ( wave 1= wave 5).

With  wave 5-3 being completed at 9110 it is now possible to derive the overall target of major wave 5 which could touch 9840.

Brent Resumes the Up Trend ??

Brent found support at  $42 levels and has reversed to test $47 . In spite of heavy short built up, the reversal may have come as a surprise as traders scramble to cover their shorts, in the process propel the prices higher.  On the daily charts,  Brent may find resistance at $47-$47.50 levels and may consolidate between $45 to $47 levels before the next move.

On the weekly charts, with the momentum picking up, a crossover of the trigger (yellow dotted) line above zero may indicate resumption of the uptrend after a brief correction from $52 to $42, a 38.2% retracement, common  during  an up move.

With the long term trend gradually picking up,  higher targets nearing $65 cannot be ruled out in the next few months. 

We had earlier indicate the possibility of Brent correcting to $43 levels and resuming the uptrend . See post : 

 Can Crude Move Higher, Post Correction ??