The month of February is almost over and the markets have gained around 1.1 pc. The markets have proven their historic Feb behaviour of significantly going below the Jan close and bouncing back to give a mild up move. Now, the month of March is historically a very significant one.
1. March 15th is the last date for payment of advance tax. Historically, March has low liquidity and short term interest rates spike up. This leads to withdrawal of margin funding and usually markets are lacklustre. more about that in next weel's post.
2. The opinion Polls are veering towards a NDA led government. At the same time opinion polls need to be taken cautiously. If a BJP led formation comes to power the markets will spike up.
3. A major correction is due, either before the elections or after the elections. The markets could go upto 6500-7000 and then correct or correct before reaching those heights. As time passes, the likelihood of a rise first increases.
4. If one takes into consideration, the Elliot patterns, then we should finish this correction around 5800-5900 before beginning the final wave up to coincide with the results of the elections.
As per Elliot, we had stated,
A rough labeling of the waves from 5118 can be as follows:
1. 5118 - 6142 (1024 points)
2. 6142 - 5700 (442 points)
3. 5700 - 6415 (715 points)
4. 6415 and on going
Now, a logical end to this wave would be at 6141, 6057, 5973 or 5843 which matches with our figures in point 1.
we seem to be in the last leg of the down move A-B-C.
A was 6415 - 6130
B was 6130 - 6358
C could be 6358 to 5896 """
Now this C wave could be broken into:
C-a 6358 - 5933
C-b 5933 - 62XX
C- b can be spilt into a 5933- 6106, b 6106-5985, c 5985 and ongoing to end at 6158 or 6264 approx.
So what could be our strategy now?
Buy at 5800-5900, quality stocks and be prepared to watch them go lower if the rise doesn't materialize.
The risk reward is better at 5800 than at 6200.
Followed by C-c finishing between 5750-5850.
1. March 15th is the last date for payment of advance tax. Historically, March has low liquidity and short term interest rates spike up. This leads to withdrawal of margin funding and usually markets are lacklustre. more about that in next weel's post.
2. The opinion Polls are veering towards a NDA led government. At the same time opinion polls need to be taken cautiously. If a BJP led formation comes to power the markets will spike up.
3. A major correction is due, either before the elections or after the elections. The markets could go upto 6500-7000 and then correct or correct before reaching those heights. As time passes, the likelihood of a rise first increases.
4. If one takes into consideration, the Elliot patterns, then we should finish this correction around 5800-5900 before beginning the final wave up to coincide with the results of the elections.
As per Elliot, we had stated,
A rough labeling of the waves from 5118 can be as follows:
1. 5118 - 6142 (1024 points)
2. 6142 - 5700 (442 points)
3. 5700 - 6415 (715 points)
4. 6415 and on going
Now, a logical end to this wave would be at 6141, 6057, 5973 or 5843 which matches with our figures in point 1.
we seem to be in the last leg of the down move A-B-C.
A was 6415 - 6130
B was 6130 - 6358
C could be 6358 to 5896 """
Now this C wave could be broken into:
C-a 6358 - 5933
C-b 5933 - 62XX
C- b can be spilt into a 5933- 6106, b 6106-5985, c 5985 and ongoing to end at 6158 or 6264 approx.
So what could be our strategy now?
Buy at 5800-5900, quality stocks and be prepared to watch them go lower if the rise doesn't materialize.
The risk reward is better at 5800 than at 6200.
Followed by C-c finishing between 5750-5850.
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