Commodities such as Crude, Copper, Zinc, Lead, Aluminum have showed sharp downfall in the current year.
As per Economic principle, higher the demand higher the prices whereas higher the supply lower the prices. The recent fall in Commodities is a warning signal for Global economy and hence one should not ignore this. The Companies whose business is associated with various commodities are underperforming from last few years. This indicates that investors are cautious on the growth of these companies in the future ahead. The detailed explanation of the same is given in “The Financial Waves Monthly Update” which is recently published.
On 4th December 2014, we published the following article:
Tatasteel – Commodities Price War can be near, AVOID commodity stocks!
Below we have shown how we apply Elliott wave theory on stock charts. The part of same is taken from “The Financial Waves Short Term Update” which covers Nifty and 3 stocks where short term opportunity exists.
Tata Steel 60 mins chart: (Anticipated in the morning of 4th December 2014)
Tata Steel 60 mins chart: (Happened today)
(Part of research published in the morning of 4th December 2014)
From last few sessions CNX Metals has been consolidating and we have not seen a clear trend since a month. Tata Steel was unable to show any upside momentum in the entire rally started from 7720 level in Nifty.
On 60 min basis, Tata Steel failed to generate momentum on upside and it is continuously exhibiting weakness. Prices are consolidating within a triangular structure. Now break of 455 levels will confirm that intermediate wave X completed at 490 levels and next leg on downside has started.
In short for Tata Steel break of mentioned levels is essential for a clear trend to emerge. On downside move below 455 will take prices towards 435 levels.
Happened: Prices moved in lines with our expectation. After breaking below 455 levels prices did not look back and touched the low of 434 in today’s trading session and achieved our mentioned target.
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