Cycles exist in the economy, nature and the financial markets and with the help of Cycles combined with other technical analysis we have been able to capture trends for various stocks and indices. Simply how economy has a cycle of recession and booming, stock has a cycle of highs and lows. It predicts when the next high or low will form.
Below is the daily chart showing how we were able to capture major lows using Time Cycle combined with Elliott wave theory.
Ashok Leyland daily chart:(Anticipated as on 11th of November, 2018)
(Below is the gist taken from our equity report published on 13th November, 2018)
Elliott Wave analysis:
Nifty Auto index witnessed a selling pressure in previous session and closed by 2.44% on negative note. However, Ashok Leyland managed to sustain its grounds protecting its pivot lows.
As shown on daily chart, currently wave c of Irregular Flat correction is ongoing. Prices have retraced 61.8% of wave a. Further break above 122.50 levels can extend the rally towards equality with wave a i.e. near 132 levels.
93 Day’s Time cycle: On daily chart we are showing Time cycle which has been able to capture major lows of this stock. Coincidentally the low formed near 101.65 was also captured by this cycle. Being in the first half of cycle we can expect range-bound to positive movement in coming session considering the past behavior with respect to prices.
In short, trend for Ashok Leyland is range bound and minor downside move is possible in form of wave c. Post completion of the same we can start seeing resumption of c on upside. So break above 122 can take prices towards 130 levels whereas move below 115 can result into short term down move towards 111 levels.
The above analysis clearly shows how well the cycle theory works.To know what are the different cycles that can be applied, on stocks as well as indices and other various techniques. Get access to our daily equity report published under the name of “The Financial Waves Short Term Update”. Checkout here
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