At times when emotions are running high but prices suddenly reverses without any base formation it is safe to assume that market will enter into a sideways action with no decisive break atleast for few hours or days.
clearly see such behavior on Nifty when the prices crashed from 8530 to the
lows of 7667 and then sharply reversed back on upside. Based on this scenario
we expected a sideways action before a decisive breakout again but this time
independent technique that suggests an upside move when majority are confused
is based on Hurst’s Time cycles that helps in capturing the lows and
identifying crucial turning areas. Timing is the key for trading
success. If you expected a fall but have been late by just a day and missed the
fall of Monday i.e. 24th August 2015 when Sensex was down by
nearly 1700 points, it would have made very significant impact both financially
back to Nifty short term charts and seeing how prices behaved after sharp
Nifty 60 mins chart: (picked up from morning research report of 26th August
Nifty 60 mins chart: Happened as on 27th August closing
shown on above two charts prices continued to consolidate within the range
exactly as expected over two days period. Many believe that technical analysis
or Elliott wave cannot be applied on shorter term charts whereas a few people
have myth that the same does not work for long term durations.
understand freely traded markets are Fractal in nature and the technique should
work irrespective of the time frame on which they are applied.
past few days we have given enough evidence that weighs the importance of these
techniques and the same applied right from weekly to daily and now on hourly
NOW to “The Financial Waves short term update” and get insight into why
we think the recent bounce back is going to last only for few days and the
medium term downtrend should again resume. At the same time knowing important
levels that will act as resistance to this up move is also crucial which will
help in timing the turns.
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