Market Analysis With Megh Mody

From May 2014 USDINR formed a diametric pattern which took seven months to complete. Diametric patterns are of two types Contracting and Expanding. In a diametric pattern there are seven legs (a-b-c-d-e-f-g) which are all corrective in nature. The first diametric in USDINR was expanding diametric, in a layman term, it is been termed as diamond pattern. The probability is much higher that the pair is forming another expanding diametric pattern which commenced from February 2015. Forecasting: The pair is moving in a double correction of diametric pattern, which can be labeled as (a-b-c-d-e-f-g-x-a-b-c-d-e-f-g). The first diametric shown in the chart (box) completed the last leg wave g at 62.20 levels followed by wave x which has three legs within (a-b-c). After completing wave x, the pair resumed its uptrend and plausibly started forming another diametric pattern. As per the wave counts it completed wave d in a three wave structure which is also the longest wave in the diametr

Bharti Airtel made a 52 week high of 435 levels but in last half an hour of trade the stock lost its shine and started moving lower. It closed at 425 levels after the weighted average.  There is a high possibility that the stock is moving in wedge pattern. The wedge pattern or ending diagonal pattern has five waves in it. In each five waves there are three waves which is corrective in nature (a-b-c), taking alteration into consideration. After the five waves are done it will reverse. In this case it is certain that Bharti has completed five waves and will possibly turn from hereon. On the lower side prices can moved down till 380 levels or even lower in near term or probably in June 2015 series. Bharti Airtel Daily Chart

Neo wave is the advance version of Elliott wave, the founder of this wave Glenn Neely has come out with additional patterns which were not in the major works of R. N Elliott. The contracting diametric and the 5th failure terminal pattern is found in DLF which is shown below. In a diametric formation there are two types one is contracting (bow and tie) and expanding. In this case we witness contracting formation which has seven legs (a-b-c-d-e-f-g). In the 5th failure terminal the third wave is the longest and the 5th wave fails to move above wave three. From the mid of 2013 DLF was forming a diametric formation and it completed wave g near 180 levels. Prices completed wave a of wave (a) at 180 levels. It then formed wave b of wave (a) near 140 levels, after that it rallied till 230 levels in the form of wave c of wave (a). Wave (b) was seems to be a complex correction and ended at 100 levels. Wave (c) was a 5th failure terminal and was completed at 165 levels. Currently it is movi

The pair moved up till 63.30 levels in today’s trading session, but it is important to see how wave counts are clearly visible on Daily charts. From the lows of February 2015, prices moved in a 3 wave structure and completed wave a of wave (a), followed by wave b at 61.50 of wave (a) and then wave c at 63.00 levels where it completed wave (a). Then it came down in a corrective fashion (a-b-c), where it completed wave (b). Currently it is moving up crossing the level of 63.00 levels in a 5 wave structure in which it is probably moving in a last wave i.e wave v of wave (c). Termination of this last leg of wave (c) will change the trend from positive to negative and can slip back down in near term. The next leg on the down side can be corrective or impulsive. It is imminent that prices will reverse and can test the level of 62.30-62.50 levels in coming month or so.

The recent demand pick up in Gold is undoubtedly due to escalating geopolitical concerns in Yemen. Gold which was trading near $1150 levels is now quoting above $1200 per ounce. The Fed meet last week stated that lift in interest rate will delay due to disappointing economic releases has actually helped Gold to gain strength as Dollar index tumbled till 96 levels. Yesterday Dollar index surged till 100 levels but there was no reversal seen in Gold, clearly indicating that the demand for safe haven still persists. As per wave analysis, the recent up move looks to be impulsive where it has completed wave i and wave ii. It is likely it will start its next leg which is wave iii soon pushing prices higher till $1240-1250 levels followed by wave iv on the downside and wave v which can test the level of $1280. An impulsive wave is very aggressive and completes one completes one larger degree at rapid pace. In short, the bias is positive for Gold and it is expected to test the le

European Markets are at their historic highs and can surge further in near term as well. Germany which is the largest economy of Euro zone is quoting at 12300 levels. The recent lift in European indices was due to ECB who started their massive stimulus package to uplift the economy from the clouds of deflation. As per Elliott Wave principle, prices are moving in a positive direction as a corrective pattern (a-b-c). Currently it is moving in a wave c pattern which is an impluse pattern. In an impluse pattern is more aggressive on either side and has five wave in it. Not so soon it has completed wave (iv) on the downside and it is moving higher in the form of wave (v) of wave c which can test 13000 mark. In short as far as the level of 11800 is protected on downside the bias for German DAX is positive with the possibility for the levels of 13000. DAX daily chart

Dow Jones Industrial Average is quoting at 18000 levels after no clue given by FED as when to hike the interest rate. In the recent minutes released last week, many policymakers thinks that June is an appropriate month to lift the interest rate, but the inflation is a concern. The delay has actually helped the global markets to outperform. It is always better to be one step ahead of major turnings for investors and traders to catch the trend. Advance technical analysis such as Elliott Wave can probably help to identify the reversal. From the chart it is clear that prices are moving in a complex pattern and it is advisable to stick to the basics as well. The index is protecting its previous lows and crossing its previous pivot highs. In this case there is a possibility for prices to move in a sideways direction in a range of 17800-18200. It is likely that prices can test its previous high placed at 18200, as current up move is in the form of corrective pattern (a-b-c). The c wave can