Elliott Wave Theory

[WaveSurfer]

In the first chart in down move 5 waves marked in red, there is an overlap between 1 and 4 .This is contradicting the basic rules of EWT. So the counts need to be different.

Smart_trade

Overlap is found in leading diagonals and even if i make it an abc-x-abc , the result remains the same that it should go back to 155.

 

[WaveSurfer]

wherefrom u got this chart ? i have tried several times to put nifty data into amibroker, but failed. kindly help me.

I am using metatrader4 from my data vendor i.e mcxnsecharts dot in

 

[WaveSurfer]

 

[timepass]

This whole decline is unfolding in 3 swings indicating an ending diagonal wave c and a overlap with wave one low i.e.7553 is must which it will do tomorrow hopefully. Unless , 7793 is not taken out , i expect a 3 swing down move printing new lows.

7793 !!! The big gap on the way down .. Seems far away at this time, but so did 8200 gap, and that did get taken down.

 

[WaveSurfer]

Looks like i made a typing error. It's not 7793 but 7970 i.e. wave 2 high.
Thanks for pointing it out.

As far as taking out 7793 is concerned , let's wait and watch. This 7553-7600 level is gonna prove tough for the bulls. The ominous sign of downtrend is evaporation of discount in nifty futures and coming back of premium. How amazing is it to see how the market turns traders bullish when it's about to print a wave 5 top. All the while in wave 3 , futures were trading at discount and suddenly in wave 5 , things go back to normal.

The coming back of premium in futures indicates that people were averaging their shorts and today when it was gap down , everybody closed their shorts and went long.Let's see how it pans out. Moreover, keep an eye on 100 sma on the daily which is 20 sma on weekly and the middle of bollinger band on weekly chart.
That is where the big institutional sellers will come back again in the market.

Nifty Weekly

Currently the 20 sma on weekly reads 7616.

Nifty Daily

The red trendline and the 100 sma on daily will probably blow the steam out of this buying. Let's see what happens.

 

[timepass]

Looks like i made a typing error. It's not 7793 but 7970 i.e. wave 2 high.
Thanks for pointing it out.

Does EW Theory say anything about gaps and gap filling ?

 

[prabhsingh]

RCOM Monthly Log Scale

Looks like putting in a long term bottom soon.

Weekly

Can be accumulated around 45 for a medium term target of 155.

In the second chart,the elliot wave count can be that where you have placed 2 that could be end of truncated Wave 5 taking 46.5 as starting point i.e Wave 0.Complete Wave count would be invalid if it breaks 46.5 as that would break Rule 1.

I am not sure whether you are making use of Fib ratio as well or not to give confidence on your wave count but from 46.5 till high 157.25 its clearly 5 wave move and fib ratios are also adhering to all Waves.

Wave 3 was exact 238.2% fib ratio.
Wave 4 retraced exact 50% fib ratio.

Give a try.

 

[WaveSurfer]

In the second chart,the elliot wave count can be that where you have placed 2 that could be end of truncated Wave 5 taking 46.5 as starting point i.e Wave 0.Complete Wave count would be invalid if it breaks 46.5 as that would break Rule 1.

I am not sure whether you are making use of Fib ratio as well or not to give confidence on your wave count but from 46.5 till high 157.25 its clearly 5 wave move and fib ratios are also adhering to all Waves.

Wave 3 was exact 238.2% fib ratio.
Wave 4 retraced exact 50% fib ratio.

Give a try.

Elliott wave is subjective , so everything is possible.

Good to see that you are talking about Point Zero , so i take you as a learned man who knows EW well enough and that too, practical applications of it.:clap:

So, now let me illustrate back to you by way of point zero.

Here is the weekly chart ...

Just bear with my labellings and forget the ultra big picture and assume that there is no data available before the top. So, in wave 4 , oscillator crossed back above zero line and now is below zero line but the price has not printed a new low so far.

Now, the weekly wave 5 should end with a point zero on the daily chart.
So, here is the daily chart of RCOM.

So, for the wave5 and point zero to complete on the weekly , there should be a point zero on the daily.

What the daily chart shows is currently it's in wave 4 and the oscillator is yet not above zero line. So , chances are the oscillator will go above the zero line and the stock will decline in 5 with a divergence on the oscillator and complete a point zero on the daily , which in turn will complete the point zero on the weekly.

 

[WaveSurfer]

Nifty Spot 5 Min

As per my wave counting and the oscillator reading , we have one more leg up pending to put in the top.

 

[WaveSurfer]

Nifty Spot 5 min

As can be seen from the chart, it has entered wave 1 territory but the entire upswing yesterday is clearly in 3s. So , i have labelled it as an abc.

What it tells me is that the market is still undergoing wave 4 which can be a running triangle or an expanded flat from a higher timeframe i.e. 15 min or hourly.

It has still not printed above 7553 from the daily and not completed a clean 5 wave on the 5 min. So, what i infer is the top is still not there in place and it's gonna be messy for sometime.