How Many Brokerages Warned of the Impending Collapse ??

Nifty corrected from 8500 levels to 7670 in one swift sharp move losing Rs. 7 Lakh Crores of  market capitalization. The down move was in sync with the global markets in a knee jerk reaction to the Yuan devaluation which wiped out trillions of dollars of investors wealth.

The question is how many brokerages warned of an impending correction of this magnitude in Nifty which could have led to investors hedging their positions.

We had, in our August 12, 2015 update warned of a possibility of a  correction  in the Nifty using our proprietary Triple Tend Oscillator, which helped us to see beyond the immediate trend.  Integrated Trend Analysis used alongside Elliott Wave  has once again proved to be an important tool to navigate the complex market situations.

Our Update of August 12, 2015 on Nifty

 
Way before any news flow,  TTO is able to identify the hidden trends as well as fault lines in the trend momentum. There is a lot more TTO,  presently conveys about market and price than visible on the charts.

The need is to exploit the predictive powers of  Triple Trend Oscillator for capital protection and wealth creation.

Though, the correction seems to have been competed, Nifty is yet to form a base at lower levels. This will keep the market volatile and further lower levels are not ruled out, before a new uptrend begins.

The following daily chart of Nifty indicates, the all the three TOs still in bearish territory and will take some time to repair the damage  caused by the global meltdown. The first sign of recovery  will be indicated by the short and medium TOs moving above the long TO,  which may be a few weeks away.

Nifty Daily

Nifty Correction Time Frame

A 38.2% correction on Nifty (wave 4) gives the following most probable target areas as per the following chart :

38.2% correction from the top : Target 7500
38.2% time correction : September 25, 2015

The Picture Says It All

Nifty crashed a whopping 490 point in sync with the global meltdown which was triggered by the recent Yuan devaluation.


The charts were hinting at weakness but the force with which market came crashing down came as a surprise, and perhaps a bit overdone in the Indian context where the other European markets have fallen only 2.5% -3% as against Nifty which fell almost 6% today. In four trading sessions Nifty has fallen 700 points from 8500 to 7800 based just on the global factors. All support levels were broken as Nifty sliced through them to end at the lowest point of the day.

We had in our earlier posts indicated Nifty correcting to retest the previous lows and further downside.

 Nifty to Retest Recent Lows
Is Nifty Headed for 7500 ?"

How did Triple Trend Oscillator anticipate the present correction ??

 A view of the recent weekly chart and TTO will explain the present fall.

In the chart below, the medium term trend turned down during the first fall in August ( Orange circle) which weakened the long term trend ( still above zero) but the pullback was not strong enough to repair the damage from the fall. Nifty failed to sustain above 8500 levels in the pullback indicating that the indices was preparing for further fall.

The long TO fell below zero and with the weakening medium TO a Synchronized Bearish  Alignment was in place (Yellow circle). With all the three TO falling below zero in a bearish pattern,  Nifty witnessed one of the biggest falls in recent months. With an integrated analysis of multiple trends,  TTO  hinted at a major trend reversal much in advance.