I do not always use Elliott wave or Neo wave for trading but also rely on basic Technical analysis concepts like #Movingaverage crossover, Bar technique, RSI on lot of occasions.
Market veterans differ from the rest in ways of identifying the technique or methods that are working well and which indicators to rely on during specific market movement. I juggle around with different indicators as and when required. In case on sideways market I rely a lot more on #BollingerBands whereas for confirmation I take a look at Moving averages and Bar techniques. Yes, Elliott wave, Neo wave and Time cycles are always an important aspect but in combination with these basic methods.
Now look at below method of Moving average crossover and how well it can help in identifying the key reversal areas and helping in staying in trend all the while. Below research is picked up from “The Financial waves short term update”
Nifty daily chart:
Following was published today morning before equity markets opened
In previous update we mentioned that following “expect sideways to positive action on Nifty from here on with 10600 as short term support and move above 10710 to result into further positive attempt on upside. Stock specific buying can be done as long as 10550 remains protected.”
Nifty moved as expected. Prices after a subdued start managed to gain momentum and closed near 10700 levels. This is the same level which was acting as important support and is now acting as resistance. This concept is known as polarity reversal where the support acts as resistance and vice versa. We can clearly see outperformance in Pharma and IT space which has continued. This time it was Infosys that drove the index higher along with pharma stocks like Cipla, Sunpharma, Lupin. We have been time and again highlighting that these sector can be the theme for 2018 and post that there has been substantial positive moves in them.
Nifty managed to close near 10700 and now decisive break above 10710 – 10730 zone will result into positive trend for higher levels. We are showing two different moving averages on daily scale. A combination of these averages has worked out very well in the past. Each of the swing could have been captured by simply trading based on this method. As long as blue which is the 10 days EMA is crossing above the red average we can see sustainable up move unless the average crosses back below it. We can clearly see that in up move of wave a, wave c and wave e this worked brilliantly. Also during corrective phases we can see sideways action in indicator which is visible in wave b and wave f. Now the averages and prices are again at the same point. If Nifty manages to cross above this resistance zone decisively it will again suggest to stay long as long as ……. On downside protecting ……. will be utmost important
In short, ……….
Few contents from the above are purposely omitted as it is meant for paid subscriber of “The Financial Waves short term update” equity research report. You can get access from here – Equity research
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