Hurst’s Time cycle is an important way of forecasting important lows for any index or stocks. Nifty has been following a very important Time cycle for many years that we have been using.
Look at the below daily chart of Nifty and see why we are not completely out of the wood atleast till the last week of May 2020.
Nifty daily chart (shown in monthly research report) on 8th April 2020:
Hurst’s Time cycles:
Now let us understand a few concepts about Time cycles to see which are important dates based on it.
– Nifty has so far retraced mere 38.2% of the entire crash we have seen in the month of February to March 2020. This is taken from the point of completion of wave G till the low of 7511 which completed the first leg of fall.
– Post that prices have been moving in non – trending fashion but drifting higher.
– The top made at 11500 was forecasted weeks earlier that the same will not be taken out until end of May and that has paid off extremely well. This was mentioned in 1st week of March in the daily research. The basis of this is once the cycle lows are broken the top made should remain intact until the next cycle low date which is only by end of May.
– We are again entering into the cycle sell mode. However, prices are yet to confirm a negative reversal and post we break the important support levels the reversals can be very fast and quick.
– Probably it will coincide with partial opening of lockdown as we can see Nifty formed important lows post the lock down announcement and extension of the same.
– Markets tend to do things that majority do not expect and the pullback amidst all the pessimism is classic example of the same.
– As the lockdown relaxation happens many will start expecting markets to rally but we think the cycles will put pressure on prices.
In a nutshell, we are going to enter May and the famous Wallstreet Adage “Sell in May and Go Away” might become applicable again. We will turn bullish once the cycle lows are in place which kicks in only by end of May, but until then keep a close watch on support zone and if that gets broken get ready to ride the trend again!!! Any strong momentum above 9500 will indicate an alternative scenario but multiple negative divergences on RSI is not hinting any momentum buildup for now. Stay alert and not complacent as we enter into important dates of reversals!
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