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I am an independent trader for last 7 years. I have also worked as a stock broker. By qualification I am Mechanical Engineer and MBA (Finance). I primarily trade in Indian Equities, USDINR, Index Futures and Options. I use Elliott Wave Principle as my primary tool to analyze the price behavior... More
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  • Rupee (INR) May Strengthen To 54 - 52 Zone Against The Dollar (USD)!

    Below is a 4 hourly chart of USDINR. As you can see I was tracking the (NYSE:B) wave, which seems to be done at 56.41 levels, nicely contained within parallel lines.. Prices then fell in 5 waves in wave {1}, we have also completed wave {2}. Now we can expect a fall in wave {3} of (NYSE:C), which should be pretty dynamic. We have already breached 55.45 levels, now we need to break 54.85. We may pick up momentum below 55.20 levels. Below is a daily chart of USDINR. We can see that the present consolidation is wave [4]. Post which I am expecting another impulsive advance. Whether it will be the last leg of this stupendous advance which started from 48.445 levels or just waves subdividing on multiple degrees thus targeting much higher levels, remains to be seen. The target for this wave of [4] may be in the 54-52 zone. That should be a good area for initiating long Dollar (NYSEARCA:USD) positions against Rupee (NYSEARCA:INR).

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: INR, forex
    Aug 07 6:31 AM | Link | Comment!
  • Nifty, Banknifty - Elliott Wave Analysis

    Banknifty Hourly Chart

    This is an hourly chart of Banknifty, I had marked two possible scenarios on the chart in my last post. Prices have taken the bullish path and are rising since then. There are a couple of resistances to Banknifty, the range comes around 10710-80. Once through this, we may see accelerated rise in prices.

    Below is the chart of Nifty. Here too we are following the bullish case, and right now are very close to an important resistance level, around 5350. Above this prices may rise rapidly, in wave [3] of III of {C}. But if we get resisted here, and start falling, we may go all the way down to 5030 levels, though I feel it is less likely. The preferred scenario is the one, where, we break out above 5350 and test at least 5630 on the up side.

    Nifty Hourly Chart

    Aug 07 6:23 AM | Link | Comment!
  • 13 Elliott Wave Patterns - Pattern 1 (Impulse)

    There are 13 basic patterns in Elliott Wave Analysis. I plan to discuss each one of them step by step on SA. Today I intend to discuss the first pattern in EWP, that is Impulse. An impulse consists of 5 waves, and it should satisfy 3 basic EWP rules.

    Rule I - Wave 2 should never go below the start of wave 1.

    Rule II - Wave 3 should never be the shortest of waves 1,3,5.

    Rule III - Wave 4 should not enter the territory of wave 1.

    The figure above shows a real life example and an idealized version of an impulse. No timestamps are shown on the real life chart, this implies these patterns can occur on any time frame.

    Based on these simple rules, we can build failsafe in our trading method. For Instance if you suspect that we are about to begin a new up move, and already waves 1 is in place. All you have to do is to wait for the market to pull back a bit , and again resume the up move. Once it goes past the terminal point of wave 1 (a.k.a - breakout about recent high), you can enter into a long position, and put a SL below the start of wave 1. If at all the market drifts below the start of wave 1, we know that we are wrong on the possible direction of the market, and should at once recover our capital, by getting out of the position.

    Once you have entered a long position and markets have rallied your position now has some profit. But as with life there are always setbacks in the way. So after rallying for a while prices will run into another resistance, as soon as we face resistance, i.e. wave 4, we should immediately move our stops to breakeven, because we know wave 4 should never enter the territory of wave 1. So if prices do come down and hit your stop loss, your initial view of an impulse was wrong, and hence you should get out of the markets.

    But ideally prices should consolidate in wave 4, post which we should see another rally, that last one in this sequence. At this point we should be looking for booking profits, or at least move our stops to lock in most of the advance prices have made.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 06 6:11 AM | Link | 1 Comment
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  • USD INR may strengthen to 54-52 zone.
    Aug 6, 2012
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