We can 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 on upside!


The other 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 and emotionally!

 

Now coming back to Nifty short term charts and seeing how prices behaved after sharp reversal –

 

Nifty 60 mins chart: (picked up from morning research report of 26th August 2015)



 

Nifty 60 mins chart: Happened as on 27th August closing


  

As 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.


 

Please understand freely traded markets are Fractal in nature and the technique should work irrespective of the time frame on which they are applied.


 

Over 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 time scale.


 

Subscribe 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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