By applying concepts like Time cycles, Channels and indicators like RSI or the Relative Strength Index, one can still derive amazing trades from these stocks.
The most important thing to note is that long positions should be created on stocks that move from the bottom left corner to the top right, which means it is in an uptrend and short positions can be created in stocks that move from the top left corner to the bottom right which means it is in a downtrend. This is the most basic principle which I use for my proprietary trades.
Now, let’s look at the below hourly charts and try to apply the above method:
Indiabulls Housing Finance:
Indiabulls Housing Finance shows classical time cycle of 249 hours and prices have bottomed out near the channel support as the cycle low approaches.
Post that there was a sharp bounce on the upside and the same can be seen even on the RSI indicator. The stock is in a downtrend but does provide buying opportunity near channel support and cycle lines.
After reaching the channel resistance it has again moved lower and is now retracing a portion of the rise.
Indiabulls Housing hourly chart
The stock has shown a strong rise and broke above the downward sloping channel. This stock was dragging the index lower and it is now reversing to the upside.
The trend remains positive given the fact that the last falling segment is retraced back in a faster time. As long as the gap area is unfilled use dips as a buying opportunity.
Reliance Industries hourly chart
The stock is clearly moving from the top left to the bottom right corner. It is in a strong downtrend and the time cycle low is due in the next few days.
It means that the pullback is going to be short-lived and one should look forward to shorting opportunity unless the time cycle low is behind us.
The above research highlights stock selection by using simple but powerful methods. Post that one can apply Elliott wave, Ichimoku Cloud to get exact entry and exit levels. It is a very powerful method for making a killing in the market.
Tata Motors hourly chart:
The author is Founder & CEO, Waves Strategy Advisors.
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