Market Analysis With Megh Mody

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 b...

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)

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...

USDJPY Daily Chart After winning the upper house election Prime Minister of Japan Shinzo Abe reiterated to add more stimulus to revive the ailing economy. Market participants were expecting 10 trillion yen for this fiscal but the efforts by BOJ could not meet the expectations. USDJPY which was moving in a higher high and higher low from the start of 2012, changed the trend by discontinuing the positive formation in the month of November 2015. Thereafter, prices are moving down by breaching its previous lows. From wave perspective, after completing five waves on the upside and marking a high of 125.85 in the month of April 2015, prices have started moving in a corrective mode. The corrective mode normally takes more time before the next rally starts. As of now it is moving in a double corrective pattern, in which it has completed wave b of second corrective and wave c on the downside will start, dragging prices lower below 100. In short, bear trend for USDJPY has...

MCX Zinc  Anticipated on 1st June 2016(1st month Daily chart contract) MCX Zinc Happened on 1st July 2016 (1st month Daily chart contract) In my previous update dated on 1st June 2016, I had mentioned that " The bias for MCX ZINC remains positive as it can test 143 levels only if it sustains above 132 for considerable time" Zinc crossed the level of 132 and moved higher till my mentioned level of 143 which is 80% retracement of the previous fall. This gives an indication that the metal is moving in a flat pattern. However, the 80% retracement can also be extended till 100% or 123.6% of the previous fall, eventually ending it with regular or irregular flat pattern. It is imperative for prices to reverse sharply which will be the first indication that wave b of flat is over and wave c has started on the downside. As of now the bias remains positive for this metal.

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)