Nifty: Time cycle isolation using Envelope and Detrended Price Oscillator?
Indian Equity Markets has surprised majority recently as Nifty showed spectacular up move from the lows of 6825 to 7527 till now.
This kind of quick gains in short duration is hinting that market dynamics have changed. During such times it is better to have objective tools to understand the market behavior. The Financial Waves Monthly Update is now published which covers in-depth research on Nifty applying Neo wave, Hursts Time cycle, Volume ROC and much more . Below we have shown part of research taken from recent Monthly update which explains Detrended Price Oscillator.
Nifty Weekly Time cycle chart:
The Cycle envelope helps us to identify the cycle lows and so does Detrended Price Oscillator indicator shown below that. Cycle envelope is a channel parallel to the centered Moving average that helps in cycle isolation and is used exhaustively in Hursts Time cycle identification. As per this method as well we can see the lows touching the lower end of the envelope and the highs near the upper channel. To confirm this cycle isolation further Detrended Price Oscillator is used. This oscillator is derived from the centering Moving average and removing the trend from price by taking a difference of price with centered Moving average. This oscillator shows rhythmic behavior between the periods of 85 weeks which further confirms our assumed cycle shown on the chart. In a nutshell, as Nifty failed to form a major low few months back there is possibility that we might not be able to take out .. in 2016. This means that after a strong uptrend prices might start retracing back the part of rise in form of next wave.
This research is followed by explanation on Diametric Pattern, Volume ROC and much more
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