Hi Friends,
Posting below how the Trend Channels work in Long Term.
Bajaj Finance
The Stock is in Long Term Uptrend. It's moving in Trend Channel and has Support near 2100.
If it holds the Support of trend channel it's likely to Resume the Long Term Up Trend.
Edelweiss
The Stock has Fibonacci and Trend Channel Support Between 160-170. If the Support holds it's likely to resume Uptrend.
HDFC
The stock has Weekly EMA and Trend Channel Support near 1700. If it holds the Support Long term Uptrend may resume and HDFC may head towards New ATH.
Maruti
The Stock is in Long term Uptrend. It has Support between 6900-7100. If it manages to Hold the Support. Long term Uptrend may resume for New ATH above 10000.
Thanks & Regrads,
Harsh Dixit.
Hi Friends,
Since End Jan 2018 Mid & Small Caps are in a Downtrend. And a lot of Stocks have Dropped 50-80% causing Draw Downs in Investor Portfolios. This Fall has ruined the Investor Sentiments and Faith in Equity Markets.
This Fall is more Painful to many as Despite the Mainstream Index recovered from the 10% Fall to come back to ATH Mid & Small Caps are still not showing any Signs of Recovery. Lot of Investors are shifting to Large Caps and Many want exit from the MidCap Portfolio.
But is this the Time to actually look for Buying the Mid & Small Caps? Is the Tide going to Turn? Will the Midcap Investor get back the Glory?
The answer to all above questions is : Nothing is Permanent in Market. This Time will Change. Let The Dust Settle.
The Current Fall has come after the steep Rally in last 4-5 years. And though it sounds very abnormal because of Divergence with Mainstream Index Nifty. The Fall is very much Normal Fall After almost 200-300% Rally from August 2013 Lows.
Lets have a look at Midcap 100 & Small Cap 100 Charts.
Both the MidCap 100 & SmallCap 100 Indices are Falling in a Contracting Range. Making the Falling Wedge Pattern which is Bullish Reversal Pattern. Also both the Indices nearing Uptrend Channel Support and Swing Low Support which is Unlikely to Break.
Wave Count:-
The Long Term Wave Count of both Mid & Small Cap 100 Suggest that the Indices are in Long Term Uptrend. And The Current Decline seems to be Minor Degree Wave 4. Post the completion a Robust Rally in Wave 5 is likely to Scale to New Highs in Next 15-20 Months.
As per Time Analysis and also Pattern this Wave 4 might Get over in a week or 2. The Correction will get Over once both the Indices Breakout of Falling Wedge. Post which a Robust Rally in Wave 5 is likely to Scale New Highs.
The Below Quote from the Legendary Trader Jesse Livermore suits the current situation:
“It never was my thinking
that made the big money for me. It always was my sitting. Got that? My
sitting tight!”
While your Entry is Equally Important to minimize the Risk it's also Important to give Time to Market. The Big Money is Made by Holding the Winners for at least 3-5 years.
In Investing one must remember that "Rome wasn't Built in one Day."
By no means I'm suggesting to hold Bad Stocks here. The Stock selection is most Important in Investing and it's also Important to constantly Reshuffle the Portfolio to Add Winners and Cut out Losers.
Conclusion:-
We are Expecting Bullish Trend Reversal From End July to Early August in Mid & Small Caps and One may seek to add Stocks after Own Research. The Stock selection is most important while adding Mid & Small Caps.
Declaimer:-
We are holding Mid & Small Caps Portfolio with Draw Downs limited by Continuous Reshuffling. And we would continue to Hold and add Mid & Small Caps to Portfolio for Multi-fold Gains in Next 15-20 months.
Thanks & Regards,
Harsh Dixit.
Hi Friends,
Nifty has given more than 10% Correction in last 2 months and tested 9950 in March. After this Correction Nifty has started Rising again and it tested 10520 and closed Doji on Friday near 10480 setting confusion in Minds of Traders.
After a 10% Correction this 500+ points Rise is breather to Bulls. Now the question here is whether it's Just a Relief Rally or Start of Bull Market?
Daily Chart Analysis
Let's First look at the Daily Chart of Correction in 2016. After Forming Double Bottom near 7900 with RSI Positive Divergence Nifty Broke out of Down Trend Channel near 8300. It also Closed above 89 Day Ema and Previous Swing High and RSI Broke above the Resistance of 50. Nifty tried to Retest the Breakout near 8300 however closed Positive. After this Bullish Breakout Nifty gave a Robust Rally to 11170 in Next 12 Months.
We have similar Formation on Nifty at Current Stage. After testing 9950 with RSI Positive Divergence Nifty Broke out of Downtrend near 10230. It also closed above 89 Day Ema near 10360 and closed near the Previous Swing High of 10480. RSI has given Breakout above Resistance of 50. Nifty tried to Retest 89 Day Ema but closed Positive. If Nifty Manages to Trade above 10480 consistently on Daily Closing Basis this might be Start of Bull Market in Wave (v).
Weekly Chart Analysis
After The Correction in last Quarter of 2016 Nifty Broke above 13 & 34 Week Ema near 8300 in Jan 2017 to give nearly 40% Rally in 13 Months. Currently Nifty has given Breakout above 13 & 34 Week Ema near 10220 & 10360 respectively. Until Nifty Trades above 34 Week Ema near 10360 we can Expect a Rally in Wave (v) of Bull Market.
Monthly Chart Analysis
In Correction of 2016 Nifty Broke 13 Month Ema for a while and took support of 34 Month Ema near 7900. In Jan 2017 Nifty Finally Broke abv 13 Month Ema near 8300 and gave a Robust Rally to 11170. Currently Nifty has taken Support of 13 Month Ema near 9980 which signifies that Long Term Up-Trend is Intact.
Wave Analysis
Nifty seems to be in Minor Degree Wave 3 of which the Correction in last 2 months seems to be wave (iv). As discussed above the Correction seems over as Nifty Trading above many Resistances. Once Nifty Starts Trading above 10480 on Daily Closing Basis we can Expect a Rally in Wave (v) of Minor Degree Wave 3.
Wave Target
Once the Bull Market is Confirmed as per the Guideline of Wave Equality to Wave (i) we can expect Target of around 12100 for Wave (v). In case of Wave Extension we can Expect a Target of around 13300 which is 1.618% extension of Minor Degree Wave 1. Or near 13500 which is 2.618% extension of Wave (i).
Conclusion
This Analysis will hold true until Nifty trades above 10480 Consistently on Daily Closing Basis. And in case of any Correction will take Support at 10360. Weekly Closing below 10360 will review for Bullish Outlook.
Thanks & Regards,
Harsh Dixit.
Hi Friends,
I started the Portfolio Advisory from 25th Oct, 2017. I created Model Portfolio of Stock Recommendations in Advisory. Below is snapshot of Returns in Advisory Portfolio as of Year End 2017.
Absolute Returns End 2017:
The Model Portfolio Outperformed Small Cap & Mid Cap Indices.
Returns Contribution by Sectors:
Mid Caps Contributed Highest Returns.
Allocation by Market Cap:
Higher Allocation to Mid Caps & Small Caps for Higher Returns.
Thanks & Regards,
Harsh Dixit.
