Market Analysis With Megh Mody

From the above chart of MCX Aluminium (continuous daily chart), it is visible that prices are failing to move above red trend line resistance. Apart from that, from February 2016 till date, prices are moving in a range of 100-113 levels forming a sideways consolidation pattern. As per wave analysis, prices are moving  in a barrier triangle formation from the start of 2016. The triangle pattern is bearish in nature. The beauty of this pattern is, it is formed near the resistance and can slip down near till its bottom. The target will be the width of the largest wave of the triangle pattern which needs to be measured from the breakout point. In this case it is wave a, and the break out level is below 104 so the target will be 91. However, my first level will be 104 followed by 98. In short, any sharp reversal will indicate completion of triangle pattern which will drag prices lower till 104 followed by 98 levels. The target of the pattern is 91.

On my previous update dated on 11th June 2016, I had mentioned that MCX Crude will test the support of the channel and test the level of 3100. Prices on 16th June 2016 tested the support of the rising blue channel and marked a low of 3115 which was closer to my mentioned level on 3100- Anticipated Happened. After marking a low of 3115, prices showed a strong bounce from the support of the channel. It is now expected to cross its previous high and can go even higher. As per Wave theory, the possibility for MCX Crude to move up in a double correction is showing higher probability. As it is a channelized move and it is precisely moving in a (a-b-c-x-a-b-c) pattern. After completing x it is now moving higher to start the second correction and the wave a of it. In short, expect prices to move above 3450 levels and can test 3570 levels in near term. MCX Crude 1st Month Contract (11th June 2016) MCX Crude 1st Month Contract (20th June 2016)

MCX Crude has shown a sharp reversal on Friday losing more than 2% and closing below the psychological level of 3300. International Crude is also facing the resistance of $50 even after the inventories reduced giving an indication that news was factored in. MCX Crude, has given a bar reversal on last Thursday and on the following day it gave a confirmation. For the downtrend to continue, it is imperative that prices should break the level of 3240 which is the  previous bottom. Breaking this level at faster pace will open the possibility of 3100 levels. From wave perspective, prices moved in a (a-b-c) pattern, in which wave c was almost equal of wave a to b. In wave c, wave iii was extended and wave v was a failure, thus giving an indication that prices will reverse soon. In short, the bias is negative for MCX Crude as prices can test 3100 in near term. MCX Crude (1st month contract)

MCX ZINC is probably moving in a flat pattern (3-3-5). As of now it is moving in wave b of a flat pattern. Wave a which came down to test the level of  96.65 was in the form of diametric pattern. The current up move looks to be a simple (a-b-c).  Currently it is soaring in the last leg of wave b i.e. wave c. The momentum is very strong in wave c which can be seen clearly from the below mentioned chart. To evaluate that ZINC is moving in a flat pattern some rules need to be fulfilled. 1. In a flat pattern wave b need to move above/below 61.8%. As of now there is no sign of moving above 61.8% which is placed at 132 levels. 2. Time taken by wave b has to be more than wave a, which is still lacking. If prices move above 132 levels then there is a high possibility for prices to touch 80% retracement of wave a which is placed at 143 levels. The bias for MCX ZINC remains positive as it can test 143 levels only if it sustains above 132 for considerable time. ...

USDINR is moving in a rising channel formation from past two years. As per wave analysis impulsive wave cannot move in a rising channel, so only one possibility of corrective pattern opens up which is double corrective or triple corrective pattern. The first corrective pattern which starts from May 2014, has a three wave structure of wave a followed by wave b in a running triangle pattern and wave c in an impulse. The prices then came down in three wave structure to complete wave x. The second corrective wave is again in a tree wave pattern followed by wave x and currently prices are moving in a third corrective which is a possible triangle. If this is a triple corrective pattern it can also be labelled as (w-x-y-x-z). Probable scenarios of triangle: Extracting triangle (ET): In a ET which has five legs in it (a-b-c-d-e), all the major upmoves in the triangle should be smaller than its preceding up move. As of now this rule applies to the current structure. For an ET to c...

MCX Nat Gas is moving in a range of 142-145 levels from last two trading sessions as it awaits for its inventories schedule to release today. The previous reading was 68b but the consensus is 60b. Prices are moving in a higher high and higher low formation thus giving a clear indication that the trend is firmly positive. Prices also persist in a rising channel formation which supports the positive direction. The commodity is also trading above both the short term moving averages 20 EMA and 50 SMA, where there is a bullish crossover. From wave perspective, prices are moving higher in a double corrective pattern (as of now). I jumped to this conclusion as it is a channelized move and there can be a breakout of a triangle pattern today. The first wave a started from 109 and ended at 133.80 and wave b was completed in double correction (a-b-c-x-a-b-c) and completed at 126 levels. Wave c ended at 144 and wave x completed in a triangle pattern (a-b-c-d-e). As of now the second corr...

Nifty from the low of 6825 in the month February 2016 surged till 7992 on the expiry of April 2016. The broader picture looks to be positive for broader markets but the corrections are always difficult to identify. In below chart, applying combination of basic technical tools and wave theory, it is clearly visible that prices might correct in near term. As per wave theory, one correction is over which might drag Indian equities lower in coming weeks. However, prices are continuously moving in a rising channel formation, break of this channel will open negative possibilities. Stay Ahead of major reversals and don't follow the crowd blindly. Lear Elliott and Neo Wave concepts in our next Webinar session scheduled on 21st and 22nd May 2016. For more queries mail me on meghmody@gmail.com Nifty Daily chart