Correlation amongst asset classes Part 2

Correlation - Positive or Negative is more effective if you see it on the chart, for that it is imperative that you compare two asset classes of your like. I have come up with some charts where I have two different asset classes moving either in sync or inverse with each other. MCX Crude and Nifty- Positive Correlation In the above chart, the blue line is the Nifty Index and the purple line is MCX Crude Oil placed on a weekly chart. This is how MCX Crude Oil bounced after going negative and Nifty bounced after hitting the pandemic low last year. Gold and DXY- Negative Correlation As shown in the above chart, Gold is shown in the blue line and DXY in the purple, both are moving against each other giving an indication that both are inversely related. US Interest Rates and S&P500 - Negative Correlation Historically, Equities have been moving up after the end of subprime crisis, this is because the interest rates were dragged down by the FED just before the crisis. As and when the inte

Correlation amongst asset classes Part 1

What is a correlation? Inter market analysis is a method of analyzing markets by examining the correlations between different asset classes. How may types of Correlation? There are two types of Correlation, Positive and Negative. Which is the Best Correlation? Negative Correlation. Why Negative Correlation is the best? It can help to minimize loss. For eg. There is a negative correlation in Gold and Equities, so one can invest in both the asset class to diversify the portfolio, so when there is a unprecedented event like war or Covid-19 Gold will act as a safe haven and equities can become volatile.  How to check the Correlation? The best way to understand the Correlation is to see on the charts and figure it out.  What is a Positive Correlation? A Positive Correlation is when both the asset class moves in sync with each other or can even be in tandem. What is a Negative Correlation? A Negative correlation is when two asset class show divergence or move away from each other.

BEL re-visited

 BEL half hourly chart anticipated on 14th July 2021 BEL half hourly happened on 19th July 2021 In my previous update about BEL, I had mentioned that, "P rices are set to surge till 190-192 levels over short term as far as the level of 179 is intact on the downside." The stock surged till 188 levels close to my target level. To view the previous article on BEL click on the below mentioned link I thought that it is a symmetrical triangle pattern which eventually turned into a complex correction. One thing is for sure that wave c cannot terminate at this level and so I am still open, there is also another possibility for prices to still move in wave b and so wave c has still not started. Wave b can be as complex as possible. I will monitor the movement going forward and will update timely onto this.

USDINR Elliott Wave Analysis

 USDINR hourly continuous chart From the lows of 73, prices are moving in a higher highs and higher lows and it is approaching near to its important resistance placed at 75.5 levels. RSI is also on the brink to cross its center line which will be a positive sign. Wave theory suggests that prices are moving up in impulse where in it is forming wave iv in symmetrical triangle pattern, once wave iv is over prices will start wave v which can go till 75.5 levels. Also it will complete bearish flat pattern following which the pair will start shedding all its gains and will continue to move lower and its major trend is. On immediate basis, prices can test 73 levels followed by 71 The summation is USDINR can test 75.5 levels over short term followed by 73 over medium term.

Larsen and Toubro Elliott Wave Analysis

 LT daily chart From the above chart, prices are persisting above the rising trend line and has also crossed its previous cluster of resistance of 1590 levels, all are suggesting that prices are firmly positive. However, RSI is in overbought zone and can relieve in near term. As per waves perspective, prices are moving up in wave v where it can move till 1660 to 1665 levels, which is 100% of wave i. Just a guideline which says it can achieve this level. However, failure to protect the level of 1450 levels will infuse selling pressure dragging prices way lower till 1300. The summation is prices can achieve 1660-1665 levels but it is better to have a support intact for this stock, which is placed at 1450 levels. Break of this level will falter price till 1300 levels.

Tesla Elliott Wave Analysis

 Tesla Daily chart As shown in the above chart of Tesla, prices have given a positive break in falling trend line. It has re-tested the trend line which is now acting as a support. There are chances it can again test it and can give whipsaw over the time, but the trend remains firmly positive for this stock. From Waves perspective, prices have completed the corrective pattern (a-b-c) in flat and is now opening another wave which will decide if it is impulse or corrective. I think it is a impulse wave and can move close enough or even surpass its previous high over medium term. The summation is Tesla stock is positively poised and can move higher near till $900 over even cross it over medium term.

MCX Lead with Elliott Wave Impulse

 MCX Lead hourly continuous chart  As shown in the above chart, prices are moving in a sideways direction and the base metal is contracting, seen by two trend lines.  From waves perspective, prices are moving in an impulse fashion, where it has completed wave i followed by wave ii in a flat pattern and different from wave iv as wave iv is in symmetrical triangle pattern. Wave iii is longer than wave i and so wave v is pending on the upside. The summation is MCX Lead can surge till 183-185 levels once it crosses the level of 179.8 decisively.