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Showing posts from August, 2016

IDFC: Expanding and Contracting Diametric

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IDFC is moving in a positive direction from  March 2016. As of now it has protected the upward sloping blue line which is drawn from the bottom of March till date. I strongly believe that the trend lines are always meant to be broken- it is time for short term trend to change.
Technically speaking, the stock have started exhibiting negative divergence in comparison with momentum indicators such as MACD, RSI etc. This is the first indication that the positive momentum is on the brink to diminish and prices are now expected to reverse. The first confirmation will be obtained when the level of 54 is broken on the downside.
As per wave theory, from end of March till date, prices are moving in a complex correction. The first pattern which is a seven legged pattern (a-b-c-d-e-f-g) is a diamond shape diametric immediately followed by wave x, then there is a bow and tie diametric pattern which also has seven legs in it. Now the possibility of wave x on the downside is higher or bigger revers…

MCX Lead: Bullish channel breakout

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Remember a channel breakout is a first indication that prices are about to change the direction. Prices which are moving in a falling channel changes the trend once it takes out the upper downward sloping trend line.
MCX Lead has given a bullish break in a falling channel, thus opening positive possibilities. This gives a clear picture of basic technicals.
As per advance technicals i.e. wave theory, Lead after completing diametric pattern at 107.15 where 'g' is marked moved higher thereafter in a corrective pattern. Corrective pattern has three legs in it. Wave a was a complex one, wave b completed in a running flat pattern and wave c is now open and can move higher in a five wave structure.
In short expect prices to move higher till 133-135 levels in near term as far as 125.30 is intact on the downside.
MCX Lead Daily chart (1st month contract)

USDINR Revisited

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My last update on USDINR dated on 26th May 2016 (here is the link: http://marketanalysiswithmeghmody.blogspot.in/2016/05/usdinr-possible-triangle-in-making.html) I had mentioned that the two year rally is on the way to exhaust and probably it is making a topping process in the form of triangle pattern.
On global front, Dollar index which came under pressure this month amidst release of downbeat data has accelerated selling pressure making it tumble from 97 to 94.00 odd levels. It has also turned down the probability of one rate hike from FED this year.
USDINR, finally broke the channel thus opening negative possibilities. Prices are also facing difficulty to trade above both the short term moving averages. The direction of the moving average is also facing downward thus giving an clear indication that the trend is down. 
In my previous update (the link shared above), I came up with an assumption that the topping process is probably a Extracting triangle or a Symmetrical triangle. The…