This is chart of LT (Larsen and toubro). To start with the analysis I have drawn a cycle envelope and of 32weeks to mark out turns of 80w cycle. As per this obvious lows are seen at point no 0 and 8 (marked in chart). These two points are 128 bars apart, so it must be 2 – 80w cycles. So to find 80w cycle low around centre of data, seems around point no4 (there are 2 lows ) but point no4 seems more valid looking at the subdivisions as it fits harmonicity. After doing phasing analysis – marking all the troughs for 10,20,40, and 80 week cycles, I have drawn a 80w VTL connecting lows at point no 0 and point no 4. After drawing this VTL prices have first penetrated this VTL at around end of 2014, so the high ( seeing half cycle back ) is in between april – july 2014 which is 230w cycle high. But after some weeks there is another high(before april 2015) which is higher than this high.
Q.1 ) As this is a controvercy I am not able to understand my mistake . if I change the trough markings harmonicity is broken and with this markings there is a mistake in high price.
I’d say this is a pretty solid phasing analysis Kenilgala. Yes the VTL has been broken (by median price?) but you have to give it a bit of leeway. I have found VTLs to be a little unreliable compared to FLDs. Underlying trend is a factor.
Consider carrying out a peak phasing to nail down the most probably 18 month (80w) peak in your chart. From a quick eyeball scan I would assume it is the high in May/June 2014.
A short trade taken on a break of the 32 week wave (40w nominal) connected between 4 and 6 would be a higher probability entry.
Thanks David ! So it means that my phasing analysis is correct ??
From that one chart that is the phasing analysis based on a visual approach I would be happy with!
You should plot the 40w and 80w nominal FLDs for some targets and to get your bearings etc.