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Crude Oil rebounds toward 200-SMA as the key week beginsWTI Crude Oil posts more than 1.0% intraday gain early Monday, after declining in the last three consecutive weeks, as energy traders brace for a rollercoaster week comprising multiple central bank announcements and top-tier data. In doing so, the black gold takes clues from a nearly oversold RSI (14) amid cautious optimism in the market. However, bearish MACD signals and the quote’s sustained trading beneath the 200-SMA keep the oil sellers hopeful of visiting the 61.8% Fibonacci retracement of its December 2023 to April 2024 upside, near $75.30. Following that, a seven-month-old upward-sloping support line surrounding $74.40 will be a crucial level for the bears to conquer to keep the reins. In a case where the commodity prices remain bearish past $74.40, it becomes vulnerable to drop toward the previous monthly low of around $72.40. Alternatively, the WTI Crude Oil buyers’ ability to provide a daily close beyond the 200-SMA hurdle of $78.40 won’t give them the throne as a downward-sloping resistance line from early July, close to $79.50, will challenge further advances. Also restricting the commodity’s run-up is the $80.00 threshold and a two-month-old horizontal resistance region near $80.30-60. If the energy benchmark manages to remain strong past $80.60, the 23.6% Fibonacci ratio of around $83.00 and the monthly high of $84.50 will lure the bulls. Overall, the market’s consolidation allows WTI crude Oil to lick its wounds but the bullish trend is far from the reach.
TVC:USOIL
by MTradingGlobal
GOLD UPDATE FOR UP SIDE Last week we predicted that Gold will touch 2356$ on lower side & 2439$ higher side. It actually touched 2353$ on lower side and 2432$ on higher side. Our Spot #Gold Range Prediction from 29/07/2024 to 02/08/2024 is as under. Next week can be highly volatile due to contract expiry. Gold Spot : 2355$-2451$ Gold INR : 67400-70150 Our Spot #Silver Range prediction from 29/07/2024 to 02/08/2024 is as under. Silver Spot: 27.55$-29.44$ Silver INR: 80200-85600 It must be remembered that price of precious metal depends on so many world wide factors like inflation, Fed interest rate, trade barrier, geopolitical tension, demand, supply, bond yield, dollar index , GDP, payroll data, CPI, currency fluctuation, debt ceiling , expected tax & duty changes, other commodity price crude oil etc. etc. and hence there can not be any accurate barometer of predicting precious metal price. Gold INR has been calculated taking Gold Spot international price and converting the same assuming fixed Indian rupee rate. However, this is not accurate method as change in rupee value to dollar can substantially impact Gold INR price. Pl. note that price of commodity doesn't depend upon performence of company but depend upon performence of world economy, hence it is extremely risky to trade in commodities. Commodities market also become more volatile during contract expiry. These are not a recommendation for buy or sell. This view is only for educational purpose. You are requested to consult your financial advisor before entering in to any trade.
OANDA:XAUUSDLong
by santoshshukla1996
1
GOOD NEXT WEEK UPSIDE BOOM Last week we predicted that Gold will touch 2356$ on lower side & 2439$ higher side. It actually touched 2353$ on lower side and 2432$ on higher side. Our Spot #Gold Range Prediction from 29/07/2024 to 02/08/2024 is as under. Next week can be highly volatile due to contract expiry. Gold Spot : 2355$-2451$ Gold INR : 67400-70150 Our Spot #Silver Range prediction from 29/07/2024 to 02/08/2024 is as under. Silver Spot: 27.55$-29.44$ Silver INR: 80200-85600 It must be remembered that price of precious metal depends on so many world wide factors like inflation, Fed interest rate, trade barrier, geopolitical tension, demand, supply, bond yield, dollar index , GDP, payroll data, CPI, currency fluctuation, debt ceiling , expected tax & duty changes, other commodity price crude oil etc. etc. and hence there can not be any accurate barometer of predicting precious metal price. Gold INR has been calculated taking Gold Spot international price and converting the same assuming fixed Indian rupee rate. However, this is not accurate method as change in rupee value to dollar can substantially impact Gold INR price. Pl. note that price of commodity doesn't depend upon performence of company but depend upon performence of world economy, hence it is extremely risky to trade in commodities. Commodities market also become more volatile during contract expiry. These are not a recommendation for buy or sell. This view is only for educational purpose. You are requested to consult your financial advisor before entering in to any trade.
MCX:GOLDV2024Long
by santoshshukla1996
2
SILVER UPSIDE MOVEMENT Last week we predicted that Gold will touch 2356$ on lower side & 2439$ higher side. It actually touched 2353$ on lower side and 2432$ on higher side. Our Spot #Gold Range Prediction from 29/07/2024 to 02/08/2024 is as under. Next week can be highly volatile due to contract expiry. Gold Spot : 2355$-2451$ Gold INR : 67400-70150 Our Spot #Silver Range prediction from 29/07/2024 to 02/08/2024 is as under. Silver Spot: 27.55$-29.44$ Silver INR: 80200-85600 It must be remembered that price of precious metal depends on so many world wide factors like inflation, Fed interest rate, trade barrier, geopolitical tension, demand, supply, bond yield, dollar index , GDP, payroll data, CPI, currency fluctuation, debt ceiling , expected tax & duty changes, other commodity price crude oil etc. etc. and hence there can not be any accurate barometer of predicting precious metal price. Gold INR has been calculated taking Gold Spot international price and converting the same assuming fixed Indian rupee rate. However, this is not accurate method as change in rupee value to dollar can substantially impact Gold INR price. Pl. note that price of commodity doesn't depend upon performence of company but depend upon performence of world economy, hence it is extremely risky to trade in commodities. Commodities market also become more volatile during contract expiry. These are not a recommendation for buy or sell. This view is only for educational purpose. You are requested to consult your financial advisor before entering in to any trade.
MCX:SILVERU2024Long
by santoshshukla1996
GOLD FEW UPSIDE Last week we predicted that Gold will touch 2356$ on lower side & 2439$ higher side. It actually touched 2353$ on lower side and 2432$ on higher side. Our Spot #Gold Range Prediction from 29/07/2024 to 02/08/2024 is as under. Next week can be highly volatile due to contract expiry. Gold Spot : 2355$-2451$ Gold INR : 67400-70150 Our Spot #Silver Range prediction from 29/07/2024 to 02/08/2024 is as under. Silver Spot: 27.55$-29.44$ Silver INR: 80200-85600 It must be remembered that price of precious metal depends on so many world wide factors like inflation, Fed interest rate, trade barrier, geopolitical tension, demand, supply, bond yield, dollar index , GDP, payroll data, CPI, currency fluctuation, debt ceiling , expected tax & duty changes, other commodity price crude oil etc. etc. and hence there can not be any accurate barometer of predicting precious metal price. Gold INR has been calculated taking Gold Spot international price and converting the same assuming fixed Indian rupee rate. However, this is not accurate method as change in rupee value to dollar can substantially impact Gold INR price. Pl. note that price of commodity doesn't depend upon performence of company but depend upon performence of world economy, hence it is extremely risky to trade in commodities. Commodities market also become more volatile during contract expiry. These are not a recommendation for buy or sell. This view is only for educational purpose. You are requested to consult your financial advisor before entering in to any trade.
OANDA:XAUUSDLong
by santoshshukla1996
GOLD UP DIRECTION SHORT TERM Last week we predicted that Gold will touch 2356$ on lower side & 2439$ higher side. It actually touched 2353$ on lower side and 2432$ on higher side. Our Spot #Gold Range Prediction from 29/07/2024 to 02/08/2024 is as under. Next week can be highly volatile due to contract expiry. Gold Spot : 2355$-2451$ Gold INR : 67400-70150 Our Spot #Silver Range prediction from 29/07/2024 to 02/08/2024 is as under. Silver Spot: 27.55$-29.44$ Silver INR: 80200-85600 It must be remembered that price of precious metal depends on so many world wide factors like inflation, Fed interest rate, trade barrier, geopolitical tension, demand, supply, bond yield, dollar index , GDP, payroll data, CPI, currency fluctuation, debt ceiling , expected tax & duty changes, other commodity price crude oil etc. etc. and hence there can not be any accurate barometer of predicting precious metal price. Gold INR has been calculated taking Gold Spot international price and converting the same assuming fixed Indian rupee rate. However, this is not accurate method as change in rupee value to dollar can substantially impact Gold INR price. Pl. note that price of commodity doesn't depend upon performence of company but depend upon performence of world economy, hence it is extremely risky to trade in commodities. Commodities market also become more volatile during contract expiry. These are not a recommendation for buy or sell. This view is only for educational purpose. You are requested to consult your financial advisor before entering in to any trade.
MCX:GOLDQ2024Long
by santoshshukla1996
1
GOLD WAIT FOR FEW UPSIDE Last week we predicted that Gold will touch 2356$ on lower side & 2439$ higher side. It actually touched 2353$ on lower side and 2432$ on higher side. Our Spot #Gold Range Prediction from 29/07/2024 to 02/08/2024 is as under. Next week can be highly volatile due to contract expiry. Gold Spot : 2355$-2451$ Gold INR : 67400-70150 Our Spot #Silver Range prediction from 29/07/2024 to 02/08/2024 is as under. Silver Spot: 27.55$-29.44$ Silver INR: 80200-85600 It must be remembered that price of precious metal depends on so many world wide factors like inflation, Fed interest rate, trade barrier, geopolitical tension, demand, supply, bond yield, dollar index , GDP, payroll data, CPI, currency fluctuation, debt ceiling , expected tax & duty changes, other commodity price crude oil etc. etc. and hence there can not be any accurate barometer of predicting precious metal price. Gold INR has been calculated taking Gold Spot international price and converting the same assuming fixed Indian rupee rate. However, this is not accurate method as change in rupee value to dollar can substantially impact Gold INR price. Pl. note that price of commodity doesn't depend upon performence of company but depend upon performence of world economy, hence it is extremely risky to trade in commodities. Commodities market also become more volatile during contract expiry. These are not a recommendation for buy or sell. This view is only for educational purpose. You are requested to consult your financial advisor before entering in to any trade.
MCX:GOLDQ2024Long
by santoshshukla1996
1
Crude Oil retreats from 11-week high as eventful week beginsWTI Crude Oil remains pressured after reversing from an 11-week high the previous day, especially when the US Dollar posts a corrective bounce ahead of this week’s top-tier data/events. The black gold’s retreat also highlights the importance of the support-turned-resistance line stretched from mid-December 2023 and a downward-sloping trend line from late September last year. It’s worth noting that the RSI’s pullback from the overbought territory and the receding bullish bias of the MACD signals also favor the energy benchmark’s latest consolidation. With this, the quote will likely extend the latest fall toward testing the 10-SMA support of $82.50. However, the 50% Fibonacci ratio of the commodity’s late 2023 fall and the 100-SMA, respectively near $81.40 and $80.40, quickly followed by the $80.00 psychological magnet, will challenge the Oil bears afterward. In a case where the prices remain weak past $80.00, an area comprising tops marked from mid-November 2023 to January 2024 near $79.70-25, will be the last defense of the buyers before giving control to the bears. Meanwhile, a downward-sloping resistance line from September 2023, close to $84.10 at the latest, guards the immediate upside of the black gold. Following that, the previous support line from late 2023 will test the oil buyers near $84.70. It’s worth noting, however, that a 9.5-month-old falling resistance line surrounding $86.50 appears a tough nut to crack for the commodity buyers, a break of which will allow them to challenge the yearly high of $87.60. Overall, Crude Oil is likely to witness further consolidation in prices as Fed Chair Jerome Powell’s bi-annual Testimony and the US Consumer Price Index (CPI) loom.
TVC:USOIL
by MTradingGlobal
Crude Oil bears attack key support despite upbeat OPEC+ verdictWTI Crude Oil prints a four-day losing streak while falling to over a week’s low early Monday. In doing so, the black gold fails to justify the OPEC+ decision to extend the supply cut agreement toward the end of 2024 and gradually withdraw it in 2025. It’s worth noting, however, that a four-month-old horizontal support zone surrounding $76.20-75.80 will join the nearly oversold RSI (14) line to challenge the energy bears afterward. Should the commodity drop beneath the stated key support region, the $74.20 might act as an intermediate halt during a southward trajectory targeting February’s bottom of near $71.40-35. Meanwhile, the Crude Oil recovery remains elusive unless the quote jumps back beyond the 61.8% Fibonacci retracement of February-April upside, near $77.60. Even so, a convergence of the 200-SMA and a two-month-old descending trend line, close to the $80.00 threshold, will be a tough nut to crack for buyers before taking control. In a case where the commodity prices remain firmer past $80.00, the odds of witnessing a gradual run-up toward the late April swing high, around $84.45, and then to the yearly peak of near $87.63, can’t be ruled out. Overall, Crude Oil ignores the latest bullish catalyst to approach an important support as energy traders now focus on US PMIs and NFP data.
FX:USOIL
by MTradingGlobal
GOLD BULLISH IF BREAK 73800 NEXT TARGET 74400Last week we predicted that Gold can touch 2333$ on lower side. It actually touched 2332$ on lower side. We also predicted that Our #Gold Range Prediction from 20/05/2024 to 24/05/2024 is as under. Gold Spot : 2366$-2481$ Gold INR 728000- 74500 If break 73800 next move Upside If not break 73800 can bounce back Alerts ⚠️ Trade with stop loss It must be remembered that price of precious metal depends on so many world wide factors like inflation, Fed interest rate, trade barrier, geopolitical tension, demand, supply, bond yield, dollar index , GDP, payroll data, CPI, currency fluctuation, debt ceiling , other commodity price crude oil etc. etc. and hence there can not be any accurate barometer of predicting precious metal price. Gold INR has been calculated taking Gold Spot international price and converting the same assuming fixed Indian rupee rate. However, this is not accurate method as change in rupee value to dollar can substantially impact Gold INR price. Pl. note that price of commodity doesn't depend upon performence of company but depend upon performence of world economy, hence it is extremely risky to trade in commodities. Commodities market also become more volatile during contract expiry. This are not a recommendation for buy or sell. This view is only for educational purpose. You are requested to consult your financial advisor before entering in to any trade.
MCX:GOLDM2024Long
by santoshshukla1996
1
Endurance Tech is experiencing robust growthEndurance Tech (ENDU), India's top aluminum die-casting company, is showing consistent improvement in its performance metrics. This is fueled by increasing domestic demand, a recovery in the international market, and lower raw material costs. ENDU is highly preferred among automotive ancillary firms due to its advanced product range and strong presence in the two-wheeler segment. Outlook: ENDU's robust order book is being driven by the recovery in demand. The company primarily focuses on the two-wheeler (2W) segment in the domestic market, benefiting from its advanced product range. This positions ENDU advantageously to capitalize on the expected growth in the 2W industry. The positive outlook for ENDU is supported by the significant increase in demand for two-wheelers, as indicated by monthly wholesale figures from original equipment manufacturers (OEMs). The management's confidence in the long-term potential of the Indian 2W segment is further reinforced by the company's order schedule, which anticipates a 10-12 percent industry growth in FY24. During the first nine months of FY24, Endurance Tech secured new contracts worth Rs 941 crore from OEMs other than Bajaj Auto, with approximately 60 percent being new business and the rest replacement orders. These contracts are expected to peak in FY26. Additionally, the company has obtained orders worth Rs 680 crore in the electric vehicle (EV) segment. In terms of the European business outlook, Endurance Tech's management highlighted that the easing of supply constraints allowed OEMs to increase production. Despite recessionary pressures affecting order intake, Endurance Tech successfully secured orders totaling 29 million euros during the same period. In conclusion, Endurance Tech's strong position in the Indian two-wheeler segment, focus on electric vehicles, and favorable market conditions position it as a compelling player in the automotive industry. Endurance Tech is expanding its product range by focusing on high-value offerings. This includes brake-and-clutch assemblies for motorcycles with engine capacities exceeding 200 cc, ABS systems, paper-based clutches, inverted front forks, as well as fully machined and semi-finished castings. The company has begun supplying ABS and brakes tailored for motorcycles with engine capacities of 200 cc and above, along with clutch plates. As raw material prices decrease, enhanced margins are expected. The reduction in raw material expenses has already had a positive impact, and the decline in high energy prices in Europe has further strengthened the company's operating margin. Additionally, management is actively working to improve cost efficiencies, introduce more valuable products, and replace imports, all of which are expected to contribute to further improvement in the operating margin. Valuation: Endurance Tech (ENDU) is currently trading at a valuation of 29.8 times the estimated earnings for FY25, which represents a discount of approximately 10 percent compared to its six-year average valuation of 32.7. This discounted valuation suggests significant potential for an upward movement in the stock price. We recommend that investors gradually accumulate the stock. There are several risks to consider: 1. Deceleration in demand: A slowdown in demand could negatively impact the company's financial performance. 2. Unfavorable commodity prices: Higher raw material costs, due to unfavorable commodity prices, could affect operational profitability.
NSE:ENDURANCELong
by Trendxinc
DCW | Positional Trade📊 DETAILS Sector: Commodity Chemicals Mkt Cap: 1,871 cr DCW Ltd is engaged in manufacture and sale of a diverse range of products with a focus on commodity chemicals, specialty chemicals and intermediate products. TTM PE : 19.43 (Average PE) Sector PE : 17.15 Beta : 1.04 📚 INSIGHTS Strong Performer Stock with good financial performance alongside good to expensive valuation, but lacks price momentum as suggested by technical indicators 6.15% away from 52 week high Outperformer - DCW up by 12.89% v/s NIFTY 50 up by 0.65% in last 1 month 📈 FINANCIALS Piotroski Score of 8/9 indicates Strong Financials Disclaimer: This analysis is for educational purposes only, and I'm not a SEBI registered analyst. If you found this analysis helpful, I encourage you to like and share it. Your observations and comments are also welcomed below. Your support, likes, follows, and comments motivate me to consistently share valuable insights with you. 🔍 More Analysis & Trade Setups 🔍 For more technical analysis and trade setups, make sure to follow me on TradingView: www.tradingview.com
NSE:DCWLong
by Munish_Jain
6
Natural Gas- Bullish above S3 Level on the Chart 1. Planted on the chart are Pivot and Resistance Levels of my indicator. 2. 2.931 is the S3 Level of where it is taking the support. 3. 3.402 is the pivot and 3.872 is the resistance. 4. At present, it has support between two lime horizontal lines drawn at price level between 2.9650 and 2.9740. Moreover, the price is above 100 and 200 SMA which are signs of bullishness. Also, as per William's R% the commodity is in oversold zone. Conclusion: Wait till the 11/27/23 7:45 AM candle which is pivotal for morning session and check that the price remains above S3 Level. All the above factors are indicating a pull back, in the prices of the Commodity in the coming week. Disclaimer: The information provided in this video is only for educational and informational purpose. The information provided here is not intended to be any kind of financial advise, investment advise, or any trading advise. Investment and trading in stock market is very risky and trading stocks, options and other securities involve risk. The risk of loss in stock market can be substantial. Moreover, I am not a SEBI Registered Analyst., so consult your financial advisor or do your own research before taking any trading/investment decision.
CAPITALCOM:NATURALGAS
by rekhi567
US Oil - Live Market update Please check that the pivotal candle provided in the after noon i.e. 3.07 p.m. has formed the base for the commodity and now the timing of next two candles for today has been provided on the chart. Mark high and low of these candles and buy only above high. Further, you may note that Price of the Commodity is trading above weekly pivot, which is a sign of bullishness. Disclaimer: I am not a registered Analyst with any of the National or International Agency. It is just for educational purpose. Please consult your financial advisor before making any decision. Let you grow and May! I follow you.
TVC:USOIL
by rekhi567
Bull flag challenges Gold sellers, Fed Chair Powell eyedGold price remains pressured at the lowest level in two weeks, down for the third consecutive day, as market players await Federal Reserve (Fed) Chairman Jerome Powell’s speech. That said, a downside break of the 100-SMA joins the bearish MACD signals to keep the XAUUSD bears hopeful. However, a bull flag chart formation defends the commodity buyers unless the quote stays beyond the $1,960 level comprising the stated flag’s lower line. In a case where the bullion prices remain weak past $1,960, the 200-SMA level surrounding $1,921 will act as the final defense for the buyers. On the contrary, the Gold Price recovery needs validation from the 100-SMA level of around $1,975. However, a confirmation of the next bull run could only be made if the XAUUSD manages to defy the short-term bearish channel pattern, forming part of the bull flag, by crossing the $2,000 round figure. Even so, the monthly high of around $2,010 and the $2,050 round figure might test the commodity’s upside before pushing them toward the yearly peak of $2,067. Overall, the Gold fades bullish momentum ahead of the week’s key event. However, the chart formation can surprise the markets with a fresh run-up if Powell advocates one more rate hike in 2023.
OANDA:XAUUSD
by MTradingGlobal
A possible long trade in Natural GasNatural gas has been rallying over the last week and it has broken above some key pivot levels, in this video I discuss the key level and what the potential entry point can be for the commodity when it corrects further and the potential upside target. Coupled with the fact that this commodity is also below the long term mean prices mean that the long trade has a higher probability of being right. The trade has a potential 20% upside based on the charts and perhaps it will be easier if we as traders look at holding the mini lots. Of course every trader will make a different decision based on the capital in the account.
MCX:NATURALGAS1!Long
by anshuman_05
1
nifty analysisAll the information shared in this chart is provided for strictly educational purposes only. This chart is sharing information are based on the theory of technical analysis. This is not an offer to buy or sell stocks, futures, options, commodity, forex, interests or any other trading security. Back test yourself before jump into live market consult your financial adviser and use proper risk management.All the information shared in this chart is provided for strictly educational purposes only. This chart is sharing information are based on the theory of technical analysis. This is not an offer to buy or sell stocks, futures, options, commodity, forex, interests or any other trading security. Back test yourself before jump into live market consult your financial adviser and use proper risk management.
NSE:NIFTY
by kpsureshgct
Silver pierces six-month-old resistance despite overbought RSISilver pierced 61.8% Fibonacci retracement (Fibo.) of May-September 2021 downtrend to refresh seven-month high on Tuesday. Following that, an upward sloping trend line from September 2021 challenged the metal’s buyers but couldn’t hold the forte. Also acting as the key hurdle is the overbought RSI conditions suggesting a pullback. Given the quote’s sustained trading above the $26.20 trend line figure, the 78.6% Fibo. level surrounding $27.15 and multiple levels marked during mid-2021 around $28.20 will question the commodity’s rally targeting the May 2021 peak of $28.72. Alternatively, a pullback in silver prices, which is widely anticipated, needs validation from the late 2021 peak of $25.35. Following that, January’s high of $24.68 and the 200-DMA near $24.10 will gain the market’s attention. If at all the commodity prices break $24.10 DMA support, it becomes vulnerable to test the 2022 bottom close to $22.00. During the fall, the 100-DMA level of $23.50 may act as an intermediate halt. To sum up, silver prices stay above the short-term key resistance line as the oscillators suggest a pullback move.
OANDA:XAGUSD
by MTradingGlobal
CANARA BANK bearish #Elliot_HarishRao CANARA BANK --> Elongated Flat CORRECTION Wave formations: Wave (A,B,C) denoted circle black colour Wave A ==> inner wave (a,b,c) Wave b ==> inner wave (a,b,c) Wave c ==> inner wave (1,2,3,4,5) Rules and objectives Elongated Flat: If the c-wave is more than 138.2% of wave- b, the market is forming an Elongated Flat The Elliott Wave Principle, or Elliott wave theory, is a form of technical analysis that finance traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology and price levels, such as highs and lows, by looking for patterns in prices. Ralph Nelson Elliott (1871–1948), an American accountant, developed a model for the underlying social principles of financial markets by studying their price movements, and developed a set of analytical tools in the 1930s. He proposed that market prices unfold in specific patterns, which practitioners today call Elliott waves, or simply waves. Elliott published his theory of market behavior in the book The Wave Principle in 1938, summarized it in a series of articles in Financial World magazine in 1939, and covered it most comprehensively in his final major work, Nature's Laws: The Secret of the Universe in 1946. Elliott stated that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable." he Elliott Wave Principle states that markets grow from small price movements by linking Elliot wave patterns to form larger five-wave and three-wave structures that exhibit self-similarity, applicable on all timescales. Each level of such timescales is called the degree of the wave, or price pattern. Each degree of waves consists of one full cycle of motive and corrective waves. Waves 1, 3, and 5 of each cycle are motive in character, while waves 2 and 4 are corrective. The majority of motive waves assure forward progress in the direction of the prevailing trend, in bull or bear markets, but yielding an overall principle of growth of a market. The overall movement of a wave one degree higher is upward in a bullish trend. After the initial five waves forward and three waves of correction, the sequence is repeated on a larger degree and the self-similar fractal geometry continues to unfold. The completed motive pattern comprises 89 waves, followed by a completed corrective pattern of 55 waves. Each degree of a pattern in a financial market has a name. Practitioners use symbols for each wave to indicate both function and degree. Numbers are used for motive waves, and letters for corrective waves (shown in the highest of the three idealized series of wave structures or degrees). Degrees are not strictly defined by absolute size or duration, by form. Waves of the same degree may be of very different size or duration. While exact time spans may vary, the customary order of degrees is reflected in the following sequence: Grand supercycle: multi-century Supercycle: multi-decade (about 40–70 years) Cycle: one year to several years, or even several decades under an Elliott Extension Primary: a few months to two years Intermediate: weeks to months Minor: weeks Minute: days Minuette: hours Subminuette: minutes Some analysts specify additional smaller and larger degrees. Wave personality and characteristics Elliott wave analysts (or Elliotticians) hold that each individual wave has its own signature or characteristic, which typically reflects the psychology of the moment. Understanding those personalities is key to the application of the Wave Principle; they are defined below. (Definitions assume a bull market in equities; the characteristics apply in reverse in bear markets.) Five wave pattern (dominant trend) Three wave pattern (corrective trend) Wave 1: Wave one is rarely obvious at its inception. When the first wave of a new bull market begins, the fundamental news is almost universally negative. The previous trend is considered still strongly in force. Fundamental analysts continue to revise their earnings estimates lower; the economy probably does not look strong. Sentiment surveys are decidedly bearish, put options are in vogue, and implied volatility in the options market is high. Volume might increase a bit as prices rise, but not by enough to alert many technical analysts. Wave A: Corrections are typically harder to identify than impulse moves. In wave A of a bear market, the fundamental news is usually still positive. Most analysts see the drop as a correction in a still-active bull market. Some technical indicators that accompany wave A include increased volume, rising implied volatility in the options markets and possibly a turn higher in open interest in related futures markets. Wave 2: Wave two corrects wave one, but can never extend beyond the starting point of wave one. Typically, the news is still bad. As prices retest the prior low, bearish sentiment quickly builds, and "the crowd" haughtily reminds all that the bear market is still deeply ensconced. Still, some positive signs appear for those who are looking: volume should be lower during wave two than during wave one, prices usually do not retrace more than 61.8% of the wave one gains, and prices should fall in a three wave pattern. Wave B: Prices reverse higher, which many see as a resumption of the now long-gone bull market. Those familiar with classical technical analysis may see the peak as the right shoulder of a head and shoulders reversal pattern. The volume during wave B should be lower than in wave A. By this point, fundamentals are probably no longer improving, but they most likely have not yet turned negative. Wave 3: Wave three is usually the largest and most powerful wave in a trend (although some research suggests that in commodity markets, wave five is the largest). The news is now positive and fundamental analysts start to raise earnings estimates. Prices rise quickly, corrections are short-lived and shallow. Anyone looking to "get in on a pullback" will likely miss the boat. As wave three starts, the news is probably still bearish, and most market players remain negative; but by wave three's midpoint, "the crowd" will often join the new bullish trend. Wave three often extends wave one by a ratio of 1.618:1. Wave C: Prices move impulsively lower in five waves. Volume picks up, and by the third leg of wave C, almost everyone realizes that a bear market is firmly entrenched. Wave C is typically at least as large as wave A and often extends to 1.618 times wave A or beyond. Wave 4: Wave four is typically clearly corrective. Prices may meander sideways for an extended period, and wave four typically retraces less than 38.2% of wave three (see Fibonacci relationships below). Volume is well below that of wave three. This is a good place to buy a pullback if you understand the potential ahead for wave 5. Still, fourth waves are often frustrating because of their lack of progress in the larger trend. Wave 5: Wave five is the final leg in the direction of the dominant trend. The news is almost universally positive and everyone is bullish. Unfortunately, this is when many average investors finally buy in, right before the top. Volume is often lower in wave five than in wave three, and many momentum indicators start to show divergences (prices reach a new high but the indicators do not reach a new peak). At the end of a major bull market, bears may very well be ridiculed (recall how forecasts for a top in the stock market during 2000 were received). Pattern recognition and fractals Elliott's market model relies heavily on looking at price charts. Practitioners study developing trends to distinguish the waves and wave structures, and discern what prices may do next; thus the application of the Wave Principle is a form of pattern recognition. The structures Elliott described meet the common definition of a fractal (self-similar patterns appearing at every degree of trend). Elliott wave practitioners argue that just as naturally occurring fractals often expand and grow more complex over time, the model shows that collective human psychology develops in natural patterns, via buying and selling decisions reflected in market prices: "It's as though we are somehow programmed by mathematics. Seashell, galaxy, snowflake or human: we're all bound by the same order." Critics, however, argue it is a form of pareidolia. Wave rules and guidelines A correct Elliott wave count must observe three rules: Wave 2 never retraces more than 100% of wave 1. Wave 3 cannot be the shortest of the three impulse waves, namely waves 1, 3 and 5. Wave 4 does not overlap with the price territory of wave 1, except in the rare case of a diagonal triangle formation. A common guideline called "alternation" observes that in a five-wave pattern, waves 2 and 4 often take alternate forms; a simple sharp move in wave 2, for example, suggests a complex mild move in wave 4. Alternation can occur in impulsive and corrective waves. Elliott observed that alternate waves of the same degree must be distinctive and unique in price, time, severity, and construction. All formations can guide influences on market action. The time period covered by each formation, however, is the major deciding factor in the full manifestation of the Rule of Alternation. A sharp counter-trend correction in wave 2 covers a short distance in horizontal units. This should produce a sideways counter-trend correction in wave 4, covering a longer distance in horizontal units, and vice versa. Alternation provides analysts a notice of what not to expect when analyzing wave formations. Corrective wave patterns unfold in forms known as zigzags, flats, or triangles. In turn these corrective patterns can come together to form more complex corrections. Similarly, a triangular corrective pattern is formed usually in wave 4, but very rarely in wave 2, and is the indication of the end of a correction. Fibonacci relationships R. N. Elliott's analysis of the mathematical properties of waves and patterns eventually led him to conclude that "The Fibonacci Summation Series is the basis of The Wave Principle". Numbers from the Fibonacci sequence surface repeatedly in Elliott wave structures, including motive waves (1, 3, 5), a single full cycle (8 waves), and the completed motive (89 waves) and corrective (55 waves) patterns. Elliott developed his market model before he realized that it reflects the Fibonacci sequence. "When I discovered The Wave Principle action of market trends, I had never heard of either the Fibonacci Series or the Pythagorean Diagram". The Fibonacci sequence is also closely connected to the Golden ratio (1.618). Practitioners commonly use this ratio and related ratios to establish support and resistance levels for market waves, namely the price points which help define the parameters of a trend. See Fibonacci retracement. Finance professor Roy Batchelor and researcher Richard Ramyar, a former Director of the United Kingdom Society of Technical Analysts and formerly Global Head of Research at Lipper and Thomson Reuters Wealth Management, studied whether Fibonacci ratios appear non-randomly in the stock market, as Elliott's model predicts. The researchers said the "idea that prices retrace to a Fibonacci ratio or round fraction of the previous trend clearly lacks any scientific rationale". They also said "there is no significant difference between the frequencies with which price and time ratios occur in cycles in the Dow Jones Industrial Average, and frequencies which we would expect to occur at random in such a time series". Robert Prechter replied to the Batchelor–Ramyar study, saying that it "does not challenge the validity of any aspect of the Wave Principle...it supports wave theorists' observations", and that because the authors had examined ratios between prices achieved in filtered trends rather than Elliott waves, "their method does not address actual claims by wave theorists". Prechter also claimed through the Socionomics Institute, of which he is the executive director, that data in the Batchelor–Ramyar study show "Fibonacci ratios do occur more often in the stock market than would be expected in a random environment". Extracted from the same relationship between Elliott Waves and Fibonacci ratio, a 78.6% retracement level is identified as the best place for buying or selling (in continuation to the larger trend) as it increases the risk to reward ratio up to 1:3. It has been suggested that Fibonacci relationships are not the only irrational number based relationships evident in waves. After Elliott Following Elliott's death in 1948, other market technicians and financial professionals continued to use the Wave Principle and provide forecasts to investors. Charles Collins, who had published Elliott's "Wave Principle" and helped introduce Elliott's theory to Wall Street, ranked Elliott's contributions to technical analysis on a level with Charles Dow. Hamilton Bolton, founder of The Bank Credit Analyst, also known as BCA Research Inc., provided wave analysis to a wide readership in the 1950s and 1960s through a number of annual supplements of market commentary. He also authored the book "The Elliott Wave Principle of Stock Market Behavior". Bolton introduced the Elliott Wave Principle to A.J. Frost (1908-1999), who provided weekly financial commentary on the Financial News Network in the 1980s. Over the course of his lifetime Frost's contributions to the field were of great significance and today the Canadian Society of Technical Analysts awards the A.J. Frost Memorial Award to someone each year who has also made a significant contribution to the field of technical analysis. The first A.J. Frost Memorial Award was awarded to Robert Prechter in 1999, with whom Frost co-authored the Elliott Wave Principle in 1978. Adoption and use Robert Prechter found Elliott's work while working as a market technician at Merrill Lynch. His prominence as a forecaster during the bull market of the 1980s brought wide exposure to Elliott's work. Prechter remains the most widely known Elliott analyst. Among market technicians, wave analysis is widely accepted as a component of trade. The Elliott Wave Principle is among the methods included in the exam that analysts must pass to earn the Chartered Market Technician (CMT) designation, a professional accreditation developed by the CMT Association. Robin Wilkin, Ex-Global Head of FX and Commodity Technical Strategy at JPMorgan Chase, says "the Elliott Wave Principle ... provides a probability framework as to when to enter a particular market and where to get out, whether for a profit or a loss." Jordan Kotick, Global Head of Technical Strategy at Barclays Capital and past President of the Market Technicians Association, has said that R. N. Elliott's "discovery was well ahead of its time. In fact, over the last decade or two, many prominent academics have embraced Elliott's idea and have been aggressively advocating the existence of financial market fractals." One such academic is the physicist Didier Sornette, professor at ETH Zurich. In a paper he co-authored in 1996 ("Stock Market Crashes, Precursors and Replicas") Sornette stated, It is intriguing that the log-periodic structures documented here bear some similarity with the "Elliott waves" of technical analysis ... A lot of effort has been developed in finance both by academic and trading institutions and more recently by physicists (using some of their statistical tools developed to deal with complex times series) to analyze past data to get information on the future. The 'Elliott wave' technique is probably the most famous in this field. We speculate that the "Elliott waves", so strongly rooted in the financial analysts' folklore, could be a signature of an underlying critical structure of the stock market. Technical Analysis of Stock Trends and The Elliott Wave Theorist both give very specific and systematic ways to approach developing great reward/risk ratios for entering into a business contract with the marketplace, which is what every trader should be if properly and thoughtfully executed. Glenn Neely, financial market analyst and author of the book Mastering Elliott Wave , studied the Elliott Wave Principle for years and used it to develop a forecasting method by expanding on the concepts Elliott created in the 1930s. Researchers at the Technical University of Crete found that using a neuro-fuzzy system based on the Elliott wave principle delivered returns between 9.14% and 39.05% higher than a buy-and-hold strategy when using a hypothetical 10,000 € portfolio. Criticism Benoit Mandelbrot, who developed mathematical models of market pricing based on fractal geometry, expressed caution about the validity of wave models: But Wave prediction is a very uncertain business. It is an art to which the subjective judgment of the chartists matters more than the objective, replicable verdict of the numbers. The record of this, as of most technical analysis, is at best mixed. Robert Prechter had previously stated that ideas in an article by Mandelbrot "originated with Ralph Nelson Elliott, who put them forth more comprehensively and more accurately with respect to real-world markets in his 1938 book The Wave Principle." Critics warn the Wave Principle is too vague to be useful since practitioners cannot consistently identify the beginning or end of waves, resulting in forecasts prone to subjective revisions. Technical analyst David Aronson wrote: The Elliott Wave Principle, as popularly practiced, is not a legitimate theory, but a story, and a compelling one that is eloquently told by Robert Prechter. The account is especially persuasive because EWP has the seemingly remarkable ability to fit any segment of market history down to its most minute fluctuations. I contend this is made possible by the method's loosely defined rules and the ability to postulate a large number of nested waves of varying magnitude. This gives the Elliott analyst the same freedom and flexibility that allowed pre-Copernican astronomers to explain all observed planet movements even though their underlying theory of an Earth-centered universe was wrong. Some analysts consider the Elliott Wave Principle as too dated to be applicable in today's markets, as explained by market analyst Glenn Neely: Elliott wave was an incredible discovery for its time. But, as technologies, governments, economies, and social systems have changed, the behavior of people has also. These changes have affected the wave patterns R.N. Elliott discovered. Consequently, strict application of orthodox Elliott wave concepts to current day markets skews forecasting accuracy. Markets have evolved, but Elliott has not. See also
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