The Hindu Business Line : ‘Waves to make sense of financial markets’

It would be apparent to any casual observer of stock charts that markets move in waves. Studying and interpreting these waves has come in handy in predicting complicated financial markets over the last century. The Elliott Wave Principle that is the premier set of rules and guidelines in this genre was the focus of the workshop organised by commodityindia.com in Mumbai recently.

Speaking at the workshop, Mr Jeffrey Kenney, Senior Financial Analyst at Elliot Wave International, stressed that “timing is most important in financial markets". And what better way to gauge the twists and turns in the markets than with the aid of the Elliot Wave Principle. This path-breaking work was written over eighty-years-ago by the stock market legend Ralph N. Elliott.

Practical applications

Elliott Wave International, cited to be one of the world’s largest market forecasting firms is at the forefront in propagating the legacy of R.N. Elliott. The Mumbai workshop included the basics of the Elliott Wave Principle (EWP) for the novice as well as the practical applications and the trading methodology with EWP for the old hand delegates.

When doubts were expressed regarding interpreting some patterns such as triangles that have both bullish as well as bearish implications, Mr Kennedy clarified, “Trade with the wave patterns and don’t trade with the wave count. Wave patterns don’t change. Wave count keeps changing as more price-action occurs.”

On being queried about his favourite wave pattern, Mr Kenney chose diagonals. Mr Kennedy is of the opinion that the Sensex and Nifty are currently in a long-term corrective phase. He is, however, bullish on CNX IT Index as it is in the nascent stages of an up-move that can take it back to the peak formed in 2000. In commodities, Mr Kennedy is bearish on Zinc traded on MCX.

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