9
1 www.wavesstrategy.com Mob: +91 9920422202 [email protected] Tel: +91 22 28831358 Bottom Line: RBI monetary policy, Daily Time cycle, 2 different Hourly Time cycles all are coinciding together today. Closing will be crucial! Nifty daily chart: Dec 2013 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 Feb Mar Apr M 20 30 40 50 60 70 80 90 Money Flow Index (64.4076) 0 10000 20000 30000 40000 x10000 Volume (177,579,424) 4900 5000 5100 5200 5300 5400 5500 5600 5700 5800 5900 6000 6100 6200 6300 6400 6500 6600 6700 6800 5545 6100 w x y v a (c) b c a (w) b c [X] v a b c x O P O O O P O x w x y x NSENIFTY (6,723.15, 6,730.05, 6,662.40, 6,704.20, +8.30029) April 01, 2014

The Financial Waves STU 20140401

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Page 1: The Financial Waves STU 20140401

1 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

Bottom Line: RBI monetary policy, Daily Time cycle, 2 different Hourly Time cycles all are coinciding together today. Closing will be crucial!

Nifty daily chart:

Dec 2013 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 Feb Mar Apr May

203040

50607080

90Money Flow Index (64.4076)

0

10000

20000

30000

40000

x10000

Volume (177,579,424)

4900

5000

5100

5200

5300

5400

5500

5600

5700

5800

5900

6000

6100

6200

6300

6400

6500

6600

6700

6800

a

b

c

d

e

X

Z

v

(b)

w

xa

b

c

a

b

c

(a)

i

ii

5545

6100

w

x

yiv

a

(c)b

c

a

(w)

b

c[X]

iii

v

a

b

c

x

O

P

O

O

O

P

O

x

wx

y

x

NSENIFTY (6,723.15, 6,730.05, 6,662.40, 6,704.20, +8.30029)

April 01, 2014

Page 2: The Financial Waves STU 20140401

The Financial Waves Short term Update – April 01, 2014

2 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

Nifty 60 mins chart:

10 17 24 3

March

10 18 24 31

April

30

40

50

60

70

80

90Relative Strength Index (63.7058)

5950

6000

6050

6100

6150

6200

6250

6300

6350

6400

6450

6500

6550

6600

6650

6700

6750

x

c

5970

a

b

6180

c

5990

x

S

H

S

wa

b

c

y

x

5700

z

b

Wedge

a

c

d

ec(e)

x

w

a

b

c

y

S

S

H

d

e

i

ii

iiiiv

v

GAP

GAP

a

b

a

b

c

x

a

b

c

5830

6040

i

ii

iii

iv

i

iii

iv

v

6220

v

c

w

x

b

5970

c

a

ii

d

ey

a

x

(a)

(b)

74 period Time Cycle

6350

6130(c)

b

c

GAP

6170

6097a

b

c

x

a5950

b

cX

ab

c

x

a b

6080

6120

6170

6630

6400

c

x

6490

a

b

NIFTY (6,684.85, 6,709.55, 6,684.60, 6,701.55, +17.35)

Wave Analysis: In previous update we mentioned that “Nevertheless, unless price confirms the trend continue to be on upside. Break below 6570 will provide 1st negative confirmation. Let us see if prices pay heed to Time cycles both medium term and short term which are due this week or ignore them and continue to move alone!” Indian equity markets continue to move in a very similar fashion. Prices had a Gap up opening which got filled in first few hours. We mentioned importance of Gaps in previous update. Yesterday Nifty had a range bound movement between 6730 and 6660. However, prices continued to protect the lows of previous day and closed positive. Market reaction to RBI policy will be crucial. Last time when RBI raised interest rates Nifty still managed to close positive. As per 365 days Bond yield that tracks RBI actions and leads to some extent is suggesting there will not be any increase in key policy rates. But the new RBI governor is known for surprises and last time even the Bond traders were caught on wrong side. This time bond yields have actually eased from near 9% to 8.88% indicating there should not be any rate hike. One of the important patterns that indicate continuation of trend is formation of higher highs and higher lows. From the lows of 6481 made on 22nd March not a single bar has closed below previous day’s low. From trading perspective this bar technique is very important. This is an anticipatory trend following method and does not carry forecasting ability. It means that as long as prices manage to close above the previous day’s low the trend will continue to be positive. So a close below previous low of 6660 will indicate atleast a pause in current up move whereas move above 6730 will continue the trend on upside. As shown on daily chart, 49 days daily Time cycle is due today. Along with this the hourly time cycle shown on 60 mins chart is also due. Short term RSI continues to show loss of momentum in the move post 6490. The internal structure of this move is also overlapping and well contained within the channel which can probably be a wedge formation in wave c. In short, the trend is positive as long as prices does not close below 6630 – 6650. Volatility can be high based on above mentioned event and Time cycle today. Closing level will be crucial!

Page 3: The Financial Waves STU 20140401

The Financial Waves Short term Update – April 01, 2014

3 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

Yes Bank Daily chart:

S O N D 2013 M A M J J A S O N D 2014 M A M J

50

Money Flow Index (57.5848)

150

200

250

300

350

400

450

500

550

0.0%

23.6%

38.2%

50.0%

61.8%

100.0%

A

a

b

c

W

X

Y

X

Z230

d

eB

C

D

E

1

2

A

3 4

5

a

b

cW

a

b

cX

387

Y

YESBANK (408.000, 416.750, 403.700, 413.950, +9.05002)

Page 4: The Financial Waves STU 20140401

The Financial Waves Short term Update – April 01, 2014

4 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

Yes Bank 120 mins chart:

2013 Jun Jul Aug Sep Oct Nov Dec 2014 Feb Mar Apr

20

30

40

50

60

70

80Relative Strength Index (75.6737)

200

250

300

350

400

450

500

550

0.0%

23.6%

38.2%

50.0%

61.8%

100.0%

cE

1

A

2

3

4

5

a

b

cW

a

b

cx

a

b

387

357

YESBANK-I (411.10, 417.80, 405.10, 416.40, +5.20)

Wave Analysis:

Nifty, Bank Nifty along with index based stocks continued its upside rally but important thing to observe is that day by day upside momentum is decreasing and many of the stock has arrived at the crucial levels. We have picked up Yes bank which is trading at crucial levels. As shown in daily chart, prices bounced back from 300 levels in the start of March 2014 and currently trading in the 400-420 zone from where it has reversed twice. As per wave perspective, intermediate wave A completed at 220 in the month of September 2013 and since then wave c on upside is ongoing. Prices have been trading in the complex Corrective pattern in form of (w-x-y) in intermediate wave B. As of now short term trend is on upside, so one should trade accordingly. We have shown Money Flow index which gauges volume participation in the ongoing trend. We can see that, prices have are moving in the higher high pattern, however, this oscillator was unable to move above the prior high and exhibits negative divergence. This indicates warning sign as of now, but as long as we do not get negative price confirmation, trend remains positive. As shown in 120 mins chart, within intermediate wave Y, price completed minor wave b at 357 and moving higher in form of minor wave c. A strong move above 430 will suggest us to adopt the alternative count which looks to be lower probable scenario as of now. In short, the trend is positive with the support of 387. Break above 430 will increase the buying pressure. However, any sharp move below 387 followed by 357 will indicate that next leg on downside has started.

Page 5: The Financial Waves STU 20140401

The Financial Waves Short term Update – April 01, 2014

5 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

Tata Motors Weekly chart:

2006 2007 2008 2009 2010 2011 2012 2013 2014

20

30

40

50

60

70

80

90Relative Strength Index (59.0732)

50

100

150

200

250

300

350

400

450

500

a

1

2

3

4

X

W

Semilog

5

b

c

d

e

Y

330

Time Cycle of 95 Weeks

TATAMOTORS (401.000, 404.150, 396.650, 398.650, +1.35001)

Page 6: The Financial Waves STU 20140401

The Financial Waves Short term Update – April 01, 2014

6 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

Tata Motors 120 mins chart:

September October November December 2014 February March April

20

30

40

50

60

70

80Relative Strength Index (54.8237)

285

290295

300305

310315

320

325330

335340

345350

355

360365

370375

380385

390

395400

405410

415420

425

430

d

e

(w)

w

x

y

a

b

b

(x)

c

x

c

a

b

c

a

385

405

Y

a

b

TATAMOTORS (398.35, 400.15, 397.00, 398.50, +0.15)

Waves Analysis:

As shown in weekly chart of Tata Motors, from 2009 to start of 2011, stock showed impulsive move on upside within 5 waves and completed major degree wave at the highs of 300. After that prices continued to make a life time highs but the nature of the rally suggest that since 2011, the movement is in complex corrective pattern in form of (W-X-Y-X-Z). As per time perspective, the rally from 25 to 300 took 2 years and since then moving in the correction which is now entering in the crucial year of 2014. As per Advanced Elliott wave concept, if impulsive move has taken 2 years then following correction period should take at least 2 years or more than that. Here, we can see the same that stock is following Elliott wave rules very well. Hence, August 2014 is the period where 95 weeks time cycle is becoming due where stock should complete its correction and then should start major trend on upside which will be impulsive in nature. Before that few more months of consolidation cannot be ruled out. As shown in 120 mins chart, recently prices bounced back from the level of 380 levels and moving higher in small upward moving channel. As per wave perspective, minor wave b completed at 380 and starts to move higher in form of minor wave c. Now, on downside 385 will act as a strong support. In short, our favored view is positive with the support of 385. Any move above 405 will break immediate resistance and move towards 420/425 is possible.

Page 7: The Financial Waves STU 20140401

The Financial Waves Short term Update – April 01, 2014

7 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

Voltas Daily chart:

2013 February March April May June July August September November 2014 February March April May

20

30

40

50

60

70

80Relative Strength Index (73.0069)

55

60

65

70

75

80

85

90

95

100

105

110

115

120

125

130

135

140

145

150

155

160

165

170

Extended Trendline since 2004

O

70 S

H

S

97

iv

a

b

c

d

ev

i

ii

iii

iv

125v

b or (ii)

a or (i) i

ii

iii

iv

VOLTAS LTD (163.400, 164.200, 160.450, 161.000, -1.00000)

Page 8: The Financial Waves STU 20140401

The Financial Waves Short term Update – April 01, 2014

8 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

Voltas 120 mins chart:

30 6

2014

13 20 27 3 10

February

17 24 3 10

March

18 24 31

April

2030

4050607080

Relative Strength Index (65.0968)

95

100

105

110

115

120

125

130

135

140

145

150

155

160

165

iii

iv

v

a

b

S

b or (ii)

S

a or (i)

c

H

i

ii

iii

iv

153

VOLTAS-I (162.30, 162.80, 161.80, 162.30, +0.15)

Waves Analysis: For Voltas in the last update dated 18th March 2014, “on downside 135 is the support. Any move above 145 will take prices towards 153/155 where wave i = wave v.” We were accurate in predicting the up move of Voltas. In the last trading session, prices made a high of 164.20. Now, after the sharp rally stock has arrived at the crucial levels. As shown in daily chart, intermediate wave b or (ii) completed at 95 levels and since then moving higher in form of intermediate wave c or (iii). Momentum indicator RSI shows negative divergence which suggest that prices are in the matured stage of the up move. However, as of now we do not have any negative confirmation and future price action will provide the clues for the same. As shown in 120 mins chart, minor wave iv completed at 135 and moving higher in form of wave v which is now equal to wave i. Close above 165 will continue the positive trend and will indicate wave v is probably extending. This scenario is valid as long as 153 is intact on downside. In short, trend is positive with the support of 153. Any close above 165 will suggest extension wave v towards 170/173 levels.

Page 9: The Financial Waves STU 20140401

The Financial Waves Short term Update – April 01, 2014

9 www.wavesstrategy.com Mob: +91 9920422202

[email protected] Tel: +91 22 28831358

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