Saturday, October 15, 2011

Elliott Wave Analysis for Nifty



Elliott Wave Analysis helps one understand the prevailingTrend and probable Targets to Trade. Though quite subjective , this theory if used with classical TA methods , is quite handful. It tells the 'Sailor' about the direction of the ' Wind' as well as the distance of the 'Port'.

Lets us now analyze where we are 'sailing' as on date -

1. The Basic assumptions and counts can be viewed in the Post - Click Here We may be trading in a Double Zigzag structure since November '10 High of 6338.

We may now be in the second zigzag labelled Y. This may be in its last leg of wave
C(Y) unfolding in a five wave structure.



2. The wave C(Y) may be in the subwave 4 since the low of 4720 in August end.



3. The wave 4 may be trading in a Flat correction of 3-3-5 wave structure as A-B-C .



4. The Flat corrective Pattern developing may broadly be like below . The wave C of the Flat ends slightly above the end of the wave A , rather than significantly beyond it as in a zigzag. The Price objective of wave C is apprx. 5180 if C=A. 



5. The wave 4 may be in its last wave C ,which may be unfolding in a five wave structure as below.



6. The Fibonacci retrace targets show that its trading above the 38% and may go to 50% retrace just above the 5200 level.



7. Timewise wave 4 is related to wave 3 or wave 1-3 , often longer than them.

Wave 1-3 had taken 35 sessions to complete and we traded in the 32nd session of wave 4 on 14-10-11.

8. The Targets for  C(Y) are as discussed in Long Term update Post - Click Here

9. Its Important to note down the 'Point of Invalidation' of any count . The chart below shows them for various counts of this wave as per the hard EW rule that a wave 4 must not trade in the zone of the wave 1 of the wave structure in consideration.



10. Caution should be foremost while trading Elliott Wave Analysis alone and that to proactively . The next wave to unfold should only be traded on its confirmation. 

21 comments:

mridul said...

Too good and too deep ...amazing ..no words for the superb and sincere
work always..dil se sukriya.

Sandeep said...

Thanks again & again for providing us the analysis with such a clarity.

As in waves 3&5 and A&C we see diversion on MACD/RSI etc., so can't these indicators be used in the lower TFs for target conformations of EWs?

Regards

AAR VEE said...

@Mridul-

Thanks for appreciation.

AAR VEE said...

@Sandeep -

Yes one may use the indicators in conjunction with counts to get some confirmatory signals.

They can be done for subwaves as for main waves,one has to adjust the TF of the indicators for it .
I have been practising this on hourly and daily charts with good results.

There are no hard rules for divergences etc in indicators but normally one gets them more often than not .

Regards

piyush sharda said...

nice analysis rv,
what structure cud be fall frm 6337 nov 2010 be called if alternate count
turns out to be true.

alternate looking more probable to me because after this 5th (i st of which was 5740-5497=243 points) it wud start correcting 6337-4720. (4720 hypothetical figure)this rally may be like new bullmarket for which valuation
and sentiment not supporting. just thoughts...

FIRE said...

@RV,

Great analysis as always. Just a thought---

Is it possible that the Double Corrective has ended @4720?
You see, the first Zigzag was of (6335-5178) 1158 points and the second was of (5945-4720) 1225 points. So two nearly equal moves separated by an X wave. Another interesting thing is- C of the first Zigzag is (6181-5178) 1003 points. The last fall in the second Zigzag was of (5740-4720)1020 points. Very similar in points. So seeing the Weekly chart and these points, MAYBE the Double Corrective ended@4720.

So, a bullish count could be that a real impulse wave has started here from 4720 and minor 3 is going on. On the other hand, a bearish count could be that another X is in the making, making it a Triple Corrective. Then we can have a rally upto 5450-5500, and then the bottom falls out for 4300-4400.

Will wait eagerly for your words.

AAR VEE said...

@ Piyush -

Thanks ,

The alternate count may be a single zigzag.

AAR VEE said...

@Fire -

The double zigzag if ended ,is not supporting the wave structure of the new upmove as of now on the daily charts.

Ya on weekly charts its more clear and formation of a X wave may not be ruled out.

This zone of 5180-5225 is the gamechanger zone which will decide the move further,so now is the time to trade EW with classical TA and not be proactive on any bias.

San said...

Great post AAR VEE,

Nice words too "If a man does not know what port he is steering for, No wind is favorable to Him".

Thanks

AAR VEE said...

@San-

Thanks for dropping by and leaving comment.

Not my words ,they come with the picture :))

Regards

Sandeep said...

Thanks AAR VEE for your kind response.

Regards

Dinesh Rishi said...

:D

AAR VEE said...

Hi Dinesh ji,

:))

Regards

bizagra said...

Dear Aarvee, we still in 4th wave or finished?/

AAR VEE said...

@ bizagra -

We still in the 4th wave . Refer the hourly chart above , we are in 4th wave of the C-4 as of now , may be in a traingle since 5160(instead of irregular b).Then 5th of this C-4 left which may end at expiry or by first week.

Sandeep said...

Hi Aar Vee,

No analysis this week??

Regards

Sandeep

Sandeep said...

Hi Aar Vee,

Wishing you all a Happy & Prosperous ## DIWALI ##.

Regards

Sandeep

Anonymous said...

FIRE ,
YOUR COUNTS SEEMS PERFECT

Vanquish said...

I have resumed updating my blog -- However I now do so on a weekly basis. Please drop in and give me your valuable feedback

http://mytradinghandbook.blogspot.com/

jonak said...

ELLIOT wave should be used only for CONFIRMATION and not INDICATION ...

AAR VEE said...

@ jonak -

Different people different methods . Its trading and winning that matters rest all are tools to be used in judicious manner.

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