Sunday, June 26, 2011

Elliott Wave Analysis for Nifty

Charting the Elliott Wave counts this time seemed to be like watching the Hollywood flick , 'Vantage Point' , where an attempeted assassination of the American President is retold by several different perspectives of the eyewitness , One Truth and so many point of views. What the truth is here , will only be told by the time in future but the counts gave so many Bearish as well as Bullish perspectives that it emphasized the fact that Markets are uncertain and only prediction which will hold true is that - 

"The Markets are Unpredictable".


1. The Basic Count that I have been following is that we are in a Wave 4 on a long Term Chart .The Wave 3 started in 2003 when Nifty was sub 1000 level and ended in the start of 2008.  This wave 4 may take a shape of a Bullish Ascending Triangle Pattern to give way for wave 5 later.

"Triangles appear to reflect a balance of forces, causing a sideways movement that is usually associated with decreasing volume and volatility. Triangles contain five overlapping waves that subdivide 3-3-3-3-3 and are labeled a-b-c-d-e." - EWI

2. This 4th wave may have completed its wave 'a' down and wave 'b' up. We may now be in wave 'c' down since Nov. 2010.

3.  I tried to fit this wave 'c' down in many perspectives both bullish as well as bearish. But the most appropriate count that I got in conjunction with the Technical Indicators was a 5-3-5-3-5 sub wave pattern since the start till now . This can also be classified in a probable Double Zigzag pattern . (Single zigzag being an A-B-C pattern with 5-3-5 subwaves )

"Occasionally zigzags will occur twice, or at most, three times in succession, particularly when the first zigzag falls short of a normal target. In these cases, each zigzag is separated by an intervening "three," producing what is called a double zigzag "- EWI

4. The wave 'c' may have completed the first zigzag (A-B-C) termed as 'W' and the intervening three waves termed as 'X' . it also seems to have complete the first subwave A of the second zigzag termed as 'Y'.


5. We may now be in the wave B of the second zigzag 'Y'. The wave A may have recently terminated in a five wave downmove.

6. The Fibonacci chart shows the probable targets of the wave B-Y.

We should remember that this wave B will progress in a three sub wave , complex correction upwards . It is also a sucker wave in nature which may make the Short term Bullish and suck lots of people in believing a Larger Bullish count before it gives way to a wave C down trapping the hopefuls.

Have a Profitable 'Surfing' !!!


Kumar Technicals said...

Dear RV!

Very good work again as usual u do always. 5540-5570 looks very important resistance area, resisted many times earlier too. Keep it up & take care of you.



Piyush Sharda said...

good work rv. hello kumarji, my 2 cents are this upmove as per rv's waves is correcting entire 5944-5195. may have higher targets.

Unknown said...

Dear rajeev
Very good work.
Keep it up

MarketMentals said...

excellent write up! a sure case study

AAR VEE said...

@ Kumarji,

Ya rightly said the 5540-70 is a big resistance. Will post the detailed tech. analysis later.It clearly circles it.

Thanks and Regards

AAR VEE said...

@ PS,

Thanks PS, did some minor adjustment in the wave structure after the much awaited 3-C didnt materialize.:((

Still a long way to call for a Long term reversal. We will have to go along with ST trends in coming weeks of trading.

AAR VEE said...


Thanks for ur comment.

AAR VEE said...

@ Prentice,

Thanks and Welcome for joining in.

venkatapathy l said...

@ RV

Your write up and the charts indicate the strong possibility of an up move, simultaneously suggesting to trade with caution and proper SL.

Thanks and regards,


AAR VEE said...

@ LV ,

They indicate a complex B wave with upward bias :))

For futher details of levels and Insight ,u may please check the next post

செவ்வானம் said...
Watch d above link also.....

shriram said...

Hi RV,

Am seeing this wave count v late.

Just wanted to ask, do u take the help of S.MACD or RSI to firm up a suspected wave as TREND or CORRECTIVE?

I mean, wot is labled as a bullish correction CT, cud very well morph into a bigger ABC down, if 2252-6339 NS is a Truncated 5th (wrt prev high of 6357),

how do u firm up lables, pls guide, tks

AAR VEE said...

@shriram -

Till now I am yet to find an indicator that fits the Ew counts.

Stochs 5,34 is used by many to confirm counts.

The subwaves of a major wave may help in guiding its impulse or corrective nature.

Rather than any Indicator I find wave structure,pattern and fibonacci ratios of greater help to pin down counts.

I prefer to trade hourly counts only as guidelines and giving it weightage only after price confirmation and supporting data as options and NF O.I. etc.

EW alone doesn't fits my trading decision. It helps only as one of the guidelines.

No particular rule to firm up labels except being flexible in trading them.

Lately I am looking to avoid any indicators in trading and depend on price and volume only along with hourly counts.


shriram said...

Tks RV,

getting the same feeling.

HARD DATA (read PRICE / OI / EMAs) will always remain GOD !