Bull therapy 101-thread for technical analysis with the fundamentals


(parkhi_nazar) #837

I always held that shale would provide a ceiling for oil prices. I remember reading that the cost for shale drilling was some US$ 30-50 per barrel. I will be very surprised if oil prices sustain anything over US$ 80 per barrel - and that’s a positive (for oil) scenario!

Oil futures are also trading lower than spot. I’m a little out of my depth here because I don’t do trader talk like contango and backwardation. But to me, this says that the market expects oil prices to fall in future.


(J2EE Professional) #838

i think the first level of support is around 10200 where the trendline from feb29 low is residing… we area almost there.a close below that would be really bad now.if that happens then the trendline that you are mentioning could be touched in double quick time…ofcourse if 9940 is not respected i.e. …as mentioned in a post elsewhere the momentum here is strongest since 2008…infact as strong as 2008. this is pretty amazing actually…the ease with which it decimated 200dema… very interesting case of this fall.


#839

for me all i want is nifty to stabilize for some sustained redistribution bounces…
i have almost liquidated most parts of my core portfolio during the last run, some distribution is remaining …
for the trading pf which is also totally cash right now,manually booked gains , losses what ever there was in the positional plays a last week, with a clearer head now i am closely monitoring, the 200day wilder moving average which i trust more than any moving averages…
and nifty 50 i right at it…


the white line moving average is that one…
historically it has been the support of all the bull markets, and resistances for the bear markets…
i expect a rally form this over sold hole , specially interesting fact is, in the daily chart, the bank nifty is at this moving average and is describing a bullish divergence after breaking it today…

just sharing a personal experience…
regarding bank nifty, i have been scalping the bank stock charts last 2 weeks for which i have to use micro timeframes like 1 and 5 mins charts…last couple of days, the bulls were really making it difficult to short sell with comfort, the oversold situation was very visible, which was not the case last week… although well the market i think didnt know what to do at the end, so just “sell the Friday and go away”…

this is what happened with midcaps at the 200day wilder moving average, when it a;so displayed a bullish divergence like banknifty is doing right now…

why i am so much interested in a relief rally, is because pharma as a sector is just not correcting, the strong hands are there… one pause in the selling pressure might create a huge demand for the pharma free float… which has all completed accumulation , currently in phase d in wyckoff accumulation schematics, i have discussed the schematics before… and this has a propensity to markup…

where this is ultimately going to is anyones guess, but whats interesting this time compared to all the bull market ends, including 2008 is that, the bond market has entered a whole new territory… may be a bear market after 30years plus of bond yields on constant decline…
how this will come into the equity market, i am very skeptical…
one should be really concerned about the margin of safety and the fundamentals , from now on, while considering any risk asset… 2018 early correction, has taught me, a very important lesson, how much technical are important too…
taking out 9k on the nifty 50 should be very difficult for the bears…
coming week should be crucial decision point…


(Rits) #840

An interesting read…


#841

suven life sciences…

i do not think the rally is over , keeping this on the watchlist…

the way the weekly stochastic is placed, it looks like it has more down side/ or might go sideways…
its still grossly overbought in my indicator, and the oscillators have crossed in that, while macd looks very bearish…

this is one of the advantage my oscillators have over the conventional macd, it reduces a lot of lag out of the system which cripples macd, it has not even crossed after the fall from 337 to 250…
might take time to consolidate here in the 230 to 250 range for some time, and might also show some b wave spikes too, classical bull traps…

disclaimer… no posisitons


#842

Us indices blood bath has started…

wish indian market gave a clearer chart pattern before unleasing this …

which us markets clearly gave …

guess when central banks says all is well, …


(sushilkc) #843

@phreakv6, @Capsule91 Please can you give your insight from Reliance Industries charts. It has corrected in last one week. Will like to know how do you see this behaving going forward.


(Shrihari) #844

@sushilkc

Here is my analysis on Reliance Industries charts and hope it helps:

The stock has gone up from 1000 to its all-time high of 1329 in a span of 8 weeks. The rise has been steep with very little consolidation; therefore a correction was very much due, more so given that it is a large cap and is a $100B dollar company now.

The stock had consolidated between 900-1000 for many months and it happens to be a strong support area. The 900-950 zones in particular are even stronger.

Last week was the single largest fall in a very long time, but came with relatively low volumes. Steep corrections in a short span of time with low volumes could result in a retracement upwards either because of

  1. correction ending or
  2. a relief rally due to a formation of the B wave in a A-B-C wave correction pattern, as per the Elliott wave theory.

The stock went through a Wyckoff based accumulation pattern for many months between October 2017 and May 2018, and the corresponding distribution over a large enough timeframe has not occurred, again pointing to some relief rally sooner than later.

From a fundamental standpoint, Reliance Industries is much more diversified today as compared to a few years back, and therefore should command better valuations; further, it is poised to be at the forefront of digital data-based revolution that our country is witnessing, through Reliance Jio. Analyst targets vary substantially; anywhere from 880 to 1500 because of differing views on the future of dependency on crude oil and the corresponding valuations of the oil refining business. What analysts agree upon is the growth that Jio and the retail businesses can provide.

Looking at retracement points based on Elliott waves, it is quite difficult to point the exact wave that is correcting; this is one drawback of Elliot waves as it is easy to identify waves looking back in time but difficult to identify the exact wave that is correcting, which should be expected. There are five possibilities that I have identified, of which 950-1000 zones, could be the best-case scenario with respect to retracements and also because, it happens to be a support zone on weekly charts. This will hold only if NIFTY and global markets support, otherwise a deeper correction could be seen.

On the daily chart, the stock bounced off the 200-day daily EMA on Friday. This point could be a support area, more so because, it fits a particular A-B-C wave definition where wave C happens to be 1.618 times wave A. But the chances are slim, given the momentum behind the correction witnessed so far, which points to more correction down the road.

It is best to wait for some level of consolidation both in this stock and the NIFTY; perhaps a double bottom formation (Wave 1/2 with 2 retracing most of 1)


(sushilkc) #845

Thanks a lot @Shrihari for the detailed view.


(Shrihari) #846

One of the questions that I have been asking myself is around mechanisms to identify signs pointing towards market corrections, in advance, such as the one that we are witnessing now, based on charts.

If you look at the NIFTY daily chart, there has been no warning as such (like a double top or consolidation pointing to distribution, before the ensuing correction, etc.); instead we observe an inverted V shape chart with a large correction in a short span of time, that has taken us by surprise.

One potential way is to look at index constituents which are heavyweights. The financial services sector forms 35% of NIFTY, of which the two HDFC’s contribute 15%. Reliance is of course an index heavyweight, with ~10% contribution.

Looking at the BANKNIFTY daily charts, it had formed a triple top and was not able to cross 28400 on three different occasions starting early August. This also pointed towards a distribution of bank/NBFC stocks, for most of August. In Elliott wave parlance, Wave 5 barely crossed Wave 3, which itself was an extension, pointing towards a subsequent steep correction.

Further, HDFCBANK forms ~35% of BANKNIFTY and has had a really good run over the last few months (close to doubled since early 2017 to August 2018). A correction was again due and some consolidation was seen here in August as well. But the BANKNIFTY chart topping out was the first warning; but the problem was NIFTY continued to climb upwards.

The up-move was driven by index heavyweights like Reliance, TCS and Infosys, all of which have a large contribution to NIFTY.

The second warning was the more or less one way upward move of Reliance stock from 1150 to 1329 during the month of August, with very little consolidation. This of course meant the probability of a correction was high given that Reliance is the single largest constituent of NIFTY. A steep up-move will more often than not result in a steep correction (due to stocks tendency to regress to the mean or the tendency of multiple moving averages over different timeframes to get together when separated significantly from each other)

In the Early part of the correction as well as in August, the IT pack started appreciating. This was because rupee had breached 70 for the first time against the dollar. This further gave the false impression of NIFTY not undergoing a correction in the near future.

However, the last week has been one of the worst weeks witnessed so far as even the IT stocks corrected steeply.

To summarise, what we can learn from the above analysis is to not only look at NIFTY charts but also focus on index heavyweights like BANKNIFTY/constituents and index heavyweights like Reliance, TCS and Infosys charts, to identify when a reversal is due. Looking at NIFTY charts alone may not give pointers towards ensuing market corrections. At the least, looking at BANKNIFTY chart is a must.


#847

amar raja battery… interesting development

disclaimer… not positions, tracking
but as a caution the basic structure is not at all positive, a wyckoff redistribution is in action…
but if any one wants interested in going long here for swing trading, this one might be interesting…
not a position yet, but to be kept in radar…
i sense a turn might be happening in this scrip, in coming couple of weeks…
disclaimer… not an investing/trading recommendation
excuse the background noise, its durga puja time in kolkata here, the city is in full blown festivity…


(manivannan.g) #848


Ref:https://twitter.com/PeterLBrandt/status/1048892830742007808

Interpreting this… A close below 10200 would further strengthen the bears grip. Whereas if at all we are heading north side, 12000-12500 would be the top. This matches my EW count of nifty to top around 12400, if nifty has another rally left.


(Devaki Nandan Tripathy) #849

For the first time after 2008, Nifty daily RSI has crossed below 20. Interesting times, indeed.


(J2EE Professional) #850

true…and therefore, the end could also be near …the end of carnage or atleast the intensity of it. also hourly RSI have started giving positive divergence…


(manivannan.g) #851

Yes… Almost everything is in oversold region. Could be the darkest hours before the dawn !!! Such a vertical fall !! Tough to fit the TA forecast in these vertical slaughters.


(J2EE Professional) #852

hmm…interesting…for some reason, my parabola comes at 9950 or so… not sure how 10200 is coming… and trendline comes at 10160…and 400ema at 10252… RSI at 20-22, …looks like a good place to halt… today’s RSI divergence played to perfection. hopefully by this weekend the markets would be more stable … … monthly MACD is giving sell at this point, so this month’s low would be very very important.


(manivannan.g) #853

Nobody will be able to predict the exact number bro :slight_smile: 40-50 points difference won’t make much of a difference. If you take a lookt at Peter Brandt’s Parabola, there was a breach in 2008’s bottom. But not a significant one. That’s what I meant.


(J2EE Professional) #854

true, i agree and understand, but my parabola has a point difference of 200 points…its just the trendline which has 40 points difference from 10200 :smiley: …anyways, i am now watching the month’s low that will be made…


(vkagrawal) #855

Can anyone analyze the InoxWind Chart to understand whether it is Wyckoff Accumulation or Wyck off Distribution? I do not know how to do this technical analysis using the chart. But I have done the Share holding pattern analysis and my analysis says Stock was under Accumulation phase for a long period. I also keep watch on fundamental development/public news for this company and seems things started good now which suggest that end of Accumulation phase is near and upward journey is going to start soon.
I just wanted to get a view whether Chart study matches my Share holding pattern study or not.
Disclosure: I have invested huge in InoxWind.


(PE_Ratio) #856

Wave B completed at 916, exactly at the predicted point. Wave C is going on now. Some support should be there at 450.