May 10, 2017

Bottom Line: Nifty continued to move in a range. Advance decline ratio is concerning from medium
term perspective!

Nifty daily chart:

NIFTY - Daily 09-05-2017 Open 9337.35, Hi 9338.95, Lo 9307.7, Close 9316.85 (0.0%)
EMA(Close,20) = 9,259.66, EMA1(Close,5) = 9,313.76
9,400
e 9,316.85
c 9,313.76
9,200
9,259.66

f
a
(D) d 9,000
g
c b
e b 8,800
c a
x
d
8,600
g
f a b
d

e 8,400
f c x
f
a 8,200
d

b 8,000
c Copyright, May 2017
e Waves Strategy Advisors
g
www.wavesstrategy. com
[E]? 7,800

NIFTY - RSI(14) = 60.17

70
60.1732

30

Oct Nov Dec 2017 Feb Mar Apr May

Created with AmiBroker - adv anced charting and technical analy sis sof tware. http://www.amibroker.com

Announcements:

The Financial Waves Monthly Update is now published. Understanding the overall trend of Nifty
applying Neo wave and Gann. Outlook on Bank Nifty. IOC Long term pick. Gold / Silver ratio. Path ahead for
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 The Financial Waves Short term Update May 10, 2017
Nifty 60 mins chart:
NIFTY - Hourly 09/05/2017 4:29:59 PM Open 9317.1, Hi 9319.2, Lo 9315.2, Close
9,400
9316.85 (-0.0%) BBTop(Close,20,2) = 9,345.60, BBBot(Close,20,2) = 9,279.70
9,350
9,345.6
9,316.85
e 9,300
9,279.7
(b) 9270 9,250
c
(d)
9,200

(a) 9,150

(c) 9,100
(e)
9070 f 9,050
d 9020 9,000
Copyright, May 2017
Waves Strategy Advisors 8,950
www.wavesstrategy.com
8,900
b

NIFTY - RSI(14) = 49.20

70

49.1968

30
14 20 27 Apr 10 17 24 May 8
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 The Financial Waves Short term Update May 10, 2017
Wave analysis:

In previous update we mentioned that, Nifty is intact in narrow range. Wait for decisive
breakout. Move above 9370 will result in to continuation of positive trend in form of wave g
whereas break below 9270 will be negative sign

Nifty has continued to do what it has been doing during the entire trend which started from 7900
levels i.e. exhibiting trending move for 3 to 4 days and then moving in a range for twice to thrice
that time. It has been almost 8 days since Nifty has been moving in a narrow range of 9270 and 9370
levels. Stock specific movement has continued during this phase but as mentioned earlier not all
stocks are participating.

Advance decline ratio helps us to gauge the overall momentum when the broader market index like
Midcap and Smallcap are hitting new life time highs. We can clearly see from the chart shown above
that Advance decline line has not improved at all and it has continued to deteriorate with the rally.
This is not a healthy sign from medium term perspective and it indicates that only a few stocks are
leading the rally in high beta indices. Nevertheless, there is no negative price confirmation as yet
and so the trend will remain cautiously positive. One need to stay alert on high beta stocks and
sectors in case there is sudden reversal in this space.

As shown on daily chart, prices are exhibiting series of negative divergence with respect to
indicator RSI. There is nearly 3 negative divergence i.e. prices made new high but momentum
indicator made lower highs. It is not very often to see such series of negative divergences that to on
a daily scale. As per Advanced concepts of Elliott wave Neo wave, faster retracement of the last
wave provides confirmation that the recent trend is over and the move on opposite side has started.
So faster retracement below d-f trendline followed by complete retracement of wave f will confirm
move on opposite side has started but unless that happens one should play the range i.e. buying
near supports and selling near resistance levels. Breakout above 9370 will extend this rally further
towards the Gann projection levels of 9458 shown in current monthly research report.

As shown on hourly chart, Nifty showed sharp move on downside on 5 th May from the levels of 9370
towards 9272. The very next day we mentioned that crucial support at 9270 was protected even
though by only 2 points. This stand worked out very well and post that we have seen a bounce back
on upside towards 9339 in yesterdays session. Son markets are indeed respecting the important
support and resistance levels.

The overall pattern within wave g is not clear as of now. There is a possibility that wave g is forming
a Zigzag pattern and currently wave b is in formation in the form of Diametric structure. This wave
b has already consumed 8 days. So for this to be a valid pattern we need to see positive breakout
soon above 9370 levels.

In short, Nifty has continued to trade in a range of 9270 9370 levels. Bollinger Bands have
continued to move sideways. A breakout is now due but it is prudent to wait for direction of
breakout above or below mentioned levels for trending move to emerge in that direction.

Plot using charting tool on our website click on the symbols - Nifty, Midcap, Smallcap

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 The Financial Waves Short term Update May 10, 2017
HDFC Bank weekly chart:

HDFCBANK - Weekly 09-05-2017 Open 1538, Hi 1545.6, Lo 1528.55, Close 1535.75 (0.2%) EMA(Close,100) =

1,600
1,535.75
1,500
1,470.36

1,400
i
1,300

3 1,196.04
1,200
iii v ii
1,100

1,000
iv
4 900

800
1 i
700

ii Copyright, May 2017 600

Waves Strategy Advisors
2 www.wavesstrategy. com 500

(2) HDFCBANK - RSI(14) = 79.13

79.1318

70

2013 2014 2015 2016 2017

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helpdesk@wavesstrategy.com Tel: +91 22 28831358
 The Financial Waves Short term Update May 10, 2017
HDFC Bank 60 mins chart:

HDFCBANK - Hourly 09/05/2017 4:29:59 PM Open 1536.3, Hi 1536.5, Lo 1533.5, Close 1535.75 (0.0%) 1,620
1,600
1,580
1555 1,560
1,540
1,535.75
1,522.26
1,520
1,500
(x) 1490
1,480
(iii) iii 1,460
(v)
1,440
(y) 1,420
iv
(w) 1,400
Copyright, May 2017 1,380
(iv) Waves Strategy Advisors
1,360
www.wavesstrategy. com
1,340
1,320

(ii) HDFCBANK - RSI(14) = 50.69

70

50.6872

30
20 27 Mar 6 14 20 27 Apr 10 17 24 May 8
Created w ith AmiBroker - advanced charting and technical analysis softw are. http://w w w .amibroker.com

Wave analysis:

HDFC Bank has made life time highs at the level of 1573 and since then stock is correcting on
downside in form of overlapping nature.

As shown in weekly chart, since the start of 2016 prices are moving higher in form of intermediate
wave 5. Internal structure of the same suggests that minor wave iii is running its course which has
broken the blue as well as black channel resistance. Impulsive waves have characteristic of not
respecting the channels which we can see here. As per weekly bar technique, stock has continued to
protect the low of prior week which will keep bias on positive side. 10 weeks EMA is proxy for the
same which has continued to provide important support in the entire trend.

As shown in 60 mins chart, the rally witnessed in last one month is steep in nature and it is in form
of minute wave (v) which itself looks to be subdividing further. Recent downside correction is slow
in nature which indicates retracement rather than any major top. Hence let prices complete the
current correction. On downside 1490 is the support and move above 1555 will resume the uptrend.

In short, HDFC Bank is retracing the prior up move. 1490 is the crucial support which is also the
breakout area along with channel support. Move above 1555 will take prices towards 1600 levels.

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 The Financial Waves Short term Update May 10, 2017
Maruti daily chart:

MARUTI - Daily 09-05-2017 Open 6666, Hi 6666, Lo 6615, Close 6629.3 (-0.0%) EMA(Close,25) = 6,381.78 7,000

6,629.3
6,500
6,381.78

6,000

5,500

5,000

4,500
89 days Time Cycle

4,000
Copyright, May 2017
Waves Strategy Advisors
www.wavesstrategy. com
3,500

MARUTI - ROC(Close,14) = 8.02

10
8.01919

-10

Apr Jul Oct 2017 Apr

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 The Financial Waves Short term Update May 10, 2017
Maruti 60 mins chart:

MARUTI - Hourly 09/05/2017 4:29:59 PM Open 6630, Hi 6633.1, Lo 6626.1, Close 6629.3 (-0.0%)
6,800
6700
Copyright, May 2017 6,700
6,644.27
Waves Strategy Advisors 6,629.3
www.wavesstrategy. com 6,600
6,611.04
6,500
6500
6,400

6,300

6,200

6,100

6,000

5,900

5,800

5,700
MARUTI - RSI(14) = 45.69

70

opyright, March 2017

45.6858
aves Strategy Advisors
ww.wavesstrategy. com 30

Mar 6 14 20 27 Apr 10 17 24 May 8

Created w ith AmiBroker - advanced charting and technical analysis softw are. http://w w w .amibroker.com

Wave analysis:

Maruti continued to remain in outperforming category and prices are trading at the life time highs.
In outperforming stocks one should not try to capture the tops and following the trend is the ideal
strategy which remains positive.

As shown in daily chart of Maruti, channels has been working well. We can see that in the start of
2017 prices broke above the middle channel resistance and since then stock has continued to sustain
above this channel. This is as per polarity reversal where earlier resistance is now acting as support.
Looking at the steepness of the rally, we can expect trend to continue towards the parallel channel
resistance which is placed near 7000 levels. 50 days EMA is providing vital support which medium
term investors can follow for investments.

As shown in 60 mins chart, prices broke the channel resistance and after the same consolidation is
ongoing. In the trend from 6200 to 6700, 20 and 50 days EMA has provided important support and as
of now stock has arrived near the same. 6500 is the crucial support and move above 6700 will
indicate resumption of up move.

In short, Maruti has support at 6500 level. Break of 6700 will take prices towards 6850 level where
channel resistance is placed.

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 The Financial Waves Short term Update May 10, 2017
Reliance Capital daily chart:

RELCAPITAL - Daily 09-05-2017 Open 662.1, Hi 687.75, Lo 657.35, Close 682.5 (3.3%) EMA(Close,30) 750

700
682.5

650
626.569
c 600
599

550
x

500
a

450

x 400

b 350

Copyright, May 2017 300

Waves Strategy Advisors
www.wavesstrategy. com 250
c
(w)
200
RELCAPITAL - RSI(14) = 70.20

70.2031
70

30

Jul Oct 2016 Apr Jul Oct 2017 Apr

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 The Financial Waves Short term Update May 10, 2017
Reliance Capital 60 mins chart:

RELCAPITAL - Hourly 09/05/2017 4:29:59 PM Open 686.55, Hi 687.75, Lo 682.5, Close 682.5 (-0.6%)
720

700
682.5680

660
655 651.791
x b 640
(iii) b
v 620

a c 600
c (iv)

a 580

560
iii 540
Copyright, May 2017 520
iv Waves Strategy Advisors
i
www.wavesstrategy.com 500

480
ii
460

(ii) RELCAPITAL - RSI(14) = 68.43

70
68.4304

30
20 27 Mar 6 14 20 27 Apr 10 17 24 May 8
Created w ith AmiBroker - advanced charting and technical analysis softw are. http://w w w .amibroker.com

Wave analysis:

Irrespective of the sideways action ongoing in Nifty, Reliance Capital has continued to move higher.
This indicates that short to medium term trend remains on upside for this stock.

As shown in daily chart, since mid of 2015 prices have been trading in Expanding structure in form of
intermediate wave (x) which is forming double correction pattern. The rally witnessed in last few
months from 420 to 685 level is in form of minor wave a of second standard correction pattern. As
per the resistance of expanding trendline prices still have the upside potential and in last session
there is formation of bullish candlestick pattern which is positive sign.

As shown in 60 mins chart, impulsive rise in minor wave a has continued and as of now minute wave
(v) of the same is running on upside which is subdividing. On downside 655 should act as crucial
support where moving average along with channel support is placed.

In short, Reliance Capital trend is positive. Prices can move towards 720 level where channel
resistance is placed.

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 The Financial Waves Short term Update May 10, 2017

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