WAVES.INDIA – WILL NIFTY EVER CRACK?

The more illusive and tougher the answer get’s to this question, the more likely the crack is near. Now that we are in OCT, readers would realize how far we came from MAR lows. Our ability to accept that our Preferred scenario was weak in MAY assisted us to move to a stronger alternate after July. However, the strength of the markets have left us more than surprised. There’s nothing new here and what the current situation proves is that sometime trend following systems like ALPHA (our time analytics product) are better to use than anticipatory systems. WAVES was and will remain an anticipatory perspective report. This means the occasional conflict between ALPHA.INDIA calls and WAVES.INDIA projections might repeat.
Coming back to the crack? A few reasons. First, secular trends don’t happen just because of one sector but owing to confluence of upsides. Now the chart here suggests that the best of TECHNOLOGY performance is behind us and we are not very far from LONG NIFTY-SHORT CNXIT. If this might look strange, the respective strategy worked in NOV 2008 and the performance cycle will repeat. Second, according to Elliott wave theory when the third part of the impulse extends, the fifth travels the same distance as the first wave. This can be witnessed in NSEBANK, SBI. This means that NSEBANK also might witness supply pressure ahead. For this scenario of resistance to remain valid, NSEBANK and banking stocks should stop right here and turn down. This all may seem wishful thinking, but (third) with NIFTY monthly momentum also in overbought and prices reaching some FIB projections, we consider this as low risk entry point for shorts. If futures shorts look difficult, Options on SBI, NSEBANK and INFOSYS for DEC is not a bad bet.
Enjoy the latest WAVES.INDIA
Login for orpheus.asia member’s area here.
ORPHEUS INDIA RESEARCH
WAVES.IND is a perspective product published on Tuesday and Thursday. The report highlights Indian Stock Market top sectoral Indices and Sensex (BSE 30) viz. BSEOIL, BSESC (Small Cap), BSEMC (Mid Cap), BSEHC (BSE Health Care), BSEPHARMA (Pharmaceuticals), BSECG (Capital Goods), BSEBANK (Banking), CNXIT (Technology), BSEFMCG (FMCG), BSEAUTO (Auto) etc.. The product also covers all the 30 Sensex components. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers.
COVERAGE: REUTERS RICS. INDICES. .BSEBANK, .BSEOIL, .NSEI, .BSECG, .BSESN, .BSEAUTO, .CNXIT, .NSEBANK, CITc1, IFc1, .NSEBANK
ORPHEUS RESEARCH AT REUTERS – UNITED KINGDOM
ORPHEUS RESEARCH AT REUTERS – USA