Nifty A history of Channels CRB Index Crude USDINR

Published: Fri, 01/22/16

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Dear Members,

22 JANUARY 2016

As a very sentimental week comes to a close the index remains at very crucial levels. So I have just published a Long Short Update on the current wave count and the Immediate outlook for Nifty and Bank Nifty from here, if it interests you to see the opportunity that lies ahead right now then get it with your insiders subscription here SUBSCRIBE

In the meantime here is a chart of USDINR that I shared on Social Media and is important to know. USDINR futures in India up to Friday saw the highest Open Interest build up ever in it's history. This as we get close to the 68.8 mark that was made in 2013, in an advance that is more lethargic than the previous moves should raise some red flags. That along with volumes at then higher end of the recent range appears like over speculation on the upside potential. This is happening much after much of the whole world of currencies has already fallen so to me it appears suspect.

SBI A discussion

SBI - The wave count from the Jan 2015 high shows we are at the end of 2 zig-zags, A-B-C declines separated by X waves. There will be a third one in this progression as happens in bear markets. So we are in in wave 5 of C of this leg which is now close to a fibonacci ratio target for wave A at 138.2% of A, near 170. Whenever the 5th wave ends for this move we get an X wave up that can retrace 23.6% or 38.2% of the A-B-C, decline, and that would be followed by another A-B-C down.

sbi210116

Remember whe the stock broke the H&S neckline at 260 it was even debated as to whether this pattern works. That said it is the most respected pattern of reversal. That patterns targets are met. In doing so we are looking at a larger H&S on a quarterly chart below. I discussed this possibility years ago in IC Charts'', a document of long term charts that I used to post once in a while. This takes time to play out. And now we are breaking the neckline on this chart. Yesterday prices went slightly below it. The long term implications are that a break of 170 on closing basis suggests that the target based on the size of the head measured below the neckline could be as low as 65. This method is from classic text of John Magee. This is a deep cut but maybe more believable now as PSU banks especially the smaller ones are already breaking their respective necklines one at a time.

sbi210116a

Bank Nifty

Ever since 2006 each of the moves up did not complete clear text book 5 waves. This has kept my long term doubts on the sector open and I have shown this ending pattern before. Now prices are coming close to the lower end of this long term ending diagonal. This is a once in a lifetime chart pattern. It would rarely work if we were not at the end of a supercycle in the economy. Here this is a long term 3-3-3-3-3 structure. The most debated would be the 2013-2014 rise being 5 waves or not? There are issues is all I can say. Keep an eye on this structure as it develops. For now it looks like wave E was a throw over the line that failed. The lower trendline is near 14500

bn210116

Dollar Index

This has been my wave count on the dollar index for a while. Wave 4 and 5 are complete, wave 4 was a triangle. So the next move should be lower except that it has been along wait. Will the coming ECB meet be the trigger let us see. The start of wave III down on the dollar will give a clear trend for the weeks ahead and reverse all the optimistic wave counts for the time being. It may also help to sooth the pressure on so many currencies temporarily.

dxy210116

ADR index

As world markets continue to decline EWI just reported the 10 day average of the daily sentiment index at the lowest since March 2009. So sentiment is that extreme. No one can catch a bottom but you know when everyone thinks it is the end of the world. Last year I used the ADR index to get a better wave count than the Dow for the decline. In Sept I thought that a V wave fall from the May high was done but as prices have extended I think we are now in wave V of the decline and this is wave 3 down going on. We have also reached the 2011 lows on this index. So I will be waiting for wave 4 up to get a better risk reward for the next leg down.

adr210116

CRB

The CRB index fall from late December counts as a 5 wave decline. Does this end a Vth wave at larger degree? It could. And even if we bounce into a wave 4 or larger degree we could go back to the December high. So holding these lows the CRB index could now be in for some upside first in the near term.

crb220116

Crude

Crude - 5 wave fall from Nov high complete. So a 38.2% retracement to start with should be the first target near 35.50$. The recent low of 27.56 should hold for this.

crude220116

Copper

Copper was looking like 5 down from the Sept high for a while but I was waiting for crude to complete the vth as well. So copper should go back to the wave iv high to start with near 2.14$. The recent low being the key support level at 1.935

copper220116

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Rohit Srivastava
www.indiacharts.com
For accurate market forecasting. Market forecasting is a study of past data to assess
future probable outcomes. It is our endeavor to discuss high probability outcomes for
traders and investors. However this is not a solicitation to buy or sell stocks futures or
options or any security. Trading in any financial market should be done with sound
knowledge and the help of a qualified investment adviser. Stocks based on the Elliott
wave model are based on the Fibonacci fractal of the market and momentum indicators,
targets are based on Fibonacci maths and are only indicative of what the mathematical
model throws up. This is not a recommendation to buy/sell.
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