It is very difficult to time the market as there is a high likelihood to lose out from a winning position. To understand the crucial turning junctures it is best to apply Elliott wave for price projection and the time the turn using time cycles.

In the below chart, we have shown the application of Time cycles along with wave theory and how it can help by identifying important turning areas:

We are showing daily time cycles and it has been working very well to capture the lows every 82 days. We can see that even the panic low near 488 was made just near the cycle.

The best part is wave counts completion and the cycle coincided together. Prices also came close towards the lower end of the downward sloping channel and bounced back higher.

This, in turn, suggests that the panic low made in India Bulls Housing Finance might remain protected for weeks and the stock might start seeing positive traction.

The fall was seen in a clear zigzag corrective pattern that completed wave (c) at the lows near Rs 488.

In the above chart application of channels, Elliott wave and time cycle show strong forecasting ability but it is also important to maintain strict stop loss for such high beta stocks that are in long term downtrend and showing short term positive attempt.

So a trader might try to do a swing trading to capitalise on either direction but investors should refrain from such stocks unless monthly reversal confirmations are witnessed.

The author is Founder & CEO, Waves Strategy Advisors.

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