The outlook for India’s much watched NSE index is that we are in a complex correction and hence would expect the current strength to peter out between 5680 and 5900. The old target of sub 4800 is still valid, in my view. So I would caution againt buying anything here.
41 Comments
Thanks for the update on NSE index. I am an avid learner of Elliott Wave Principle.
As an alternate, can we assume this could be a start of significant downtrend, or 5 waves of A that is unfolding now (currently 4th wave) rather than a complex correction?
Assuming above is right (lots of assumptions), the 4th wave of A or the downward impulse, could be a widely identified flat correction and could take a while to reach the <4800 target, or is it?
Thanks,
Naga
Hi Naga, No one can confirm which i sthe right count until the move is over. From a trader’s point of view, one has to trade his theory, following rules and guidelines, and using a proper money management technique.
Thanks for the response. I just wanted to hear from your decades of experience as to how these waves normally unfold.
Dear sir
What i am assuming is that we have corrected in ABC form recently Wave A from 6338 to 5690 Wave B from 5690 to 6181 and then wave C has extension. As per my count ( in hourly chart of nifty )wave 1 of C is 6181 to 5690 wave 2 from 5690 to 5850 and then wave 3 from 5850 to 5175 which also has extension 1,2.3,4,5 . Now we are in wave 4 so how this rally pass 5690 wave 1 as you are saying 5900 pls explain ..
Abhinav, we start with the assumption that the correctionis in its first leg.If the first leg is madeof 5 waves then it is likely to be azigzag correction.If it is a 3-step move, then it is probably a ‘flat’ .If we go above the bottomof wave 1 then it could become a flat. …
Hello Sir,
May I request weekly view on Nifty ?
Y im asking this is Nifty was in bull market from 2003-2008 which is 5 years. I assume this as a cycle wave . It hit bottom in oct 2008 as per u and march 2009 as per me. But real point is with 5 years of impulse is it possible that corrective wave is of just 1 year ???? As per def correction takes approx 62 % time of impulse. So correction should have been of 3 years.
Now if i assume march 09 was A of this corrective wave , B happened @ jan 11 , is it possible we are in wave C towards old lows ???
Hello Jazz, One of the reasons that people find Elliott Wave analysis daunting is there are endless ways of counting waves, and depending on your paradigm, you can present foreceful arguments to support your stance. Unfortunately, there is no guarantee who is going to be right. Truth be told, most will be wrong, and that includes me. What really matters is whether we have got the overall direction right for the most part. Secondly, are we having a position in the direction of the anticpated move. (Frequently, I make the mistake of calling the direction correctly, but choosing to trade in the opposite direction for a counter-trend trade to pick up some small money. That is a mistake we all could well avoid, and save ourselves a lot of misery). Coming back to your question, can we go back to old lows? Anything could happen, for example, a catastrophe could strike India, and we could go there very quickly. But as of now, I will stick to my views that we have seen a 5-wave rally from 2252, and hence will initially look for a decline only to around 4800.
the down move from 6340 to 5690 is with abc form and not with simple 5 impulse towards downside..so it should mark as w and not as “a” wave..that means last down wave from 6180 to 5178 is should with abc form..and actually its unfold in abc form ,,,not 5 wave form.so most probably this correction is over…keeping only one probability alive is tripple zigzag and current upwave is ‘xx’ wave and ‘z’ down remained pending ,, (ramki sir, is that what you are actually expecting?)
Vijay, It is impossible to forecast what shape a correction will take. Two points are worth noting. First, as we believe that a five-wave rally has finished at 6430, we should look for a correction of the entire move from 2252 to 6338. EVen a 38.2% correction will take it down to 4780. Interestingly, that level lies near the 4th wave of one lesser degree. The second point is my labelling of the correction until now as ABC is tentative, atmost. Be warned that we could get a complex correction, (with accompanying difficulties in trading). The sharp rally last week is an early clue of this.
Hello Sir,
I was thinking that it will be interesting if you could make an elliott wave analysis of a stock with a larger time frame let’s say minimum 1 year investment time. I was browsing and found stocks like ford which can be a buy from 11 usd per share or apple which i think is an extended 5th wave waiting to end , etc. Your views will be most welcomed. if time allows you to have a look.
Have a great day.
I think your counting in nifty is wrong ramki.
Karthik, Many thanks for sharing your thoughts. Just a couple of days back (in a live video-interview published in http://www.marketvision.in) I was suggesting that maybe Tata Steel will come down after reaching around 635/645 levels. Looking at today’s price action, where the stock has gained 4.68%, anyone will think my counts are wrong. Trouble is, no one can be sure until AFTER the fact. As I have often said in this blog and elsewhere, in order to make money one should have a theory and trade that theory until proved wrong. That is superior to trading blindly, right? Lets see what happens in the coming days for Nifty. My count has still not been proved wrong, although it could be sometime in teh future!
Ramki Sir,
NIFTY came down from 6357 to 2252. Again from 2252 it reached peak of 6338. This is almost 100% replacement. In such is the case, the correction normally shall be FLAT Correction. Can you please explain this.
1. What is the reason you have restricted the correction to 38.2%. There are cases the correction has gone below 4th wave of one degree lesser.
2. Also when market came down from 6178 to 5178, the Intra day charts are appearing like impulsive correction. Where as you are tentatively labeled the correction as ABC. What is the reason for this different labeling.
3. As per the guide line the correction shall get terminated at 4th wave of one degree lesser count comes around 3920. Where as you have calculated at 4780. Sir, please explain this.
Hello JJ, Thanks for stopping by. Can I recommend you to study the Wave Principle carefully again? The recovery to 6338 from 2252 is not considered as a correction, but an impulse wave. Secondly, there is no such thing as impulsive correction! Finally, when we project an end point for a correction, it is a matter of judgement and there is no guarantee that it will stop there. You will have to understand the principle of alternation to appreciate why I suggest 38.2% on some occasions and a shorter, or deeper correction at other times. Good luck.
Agree with you regarding the ABC unfolding… my count suggests that wave C of ABC is currently developing… and that of this C 1,2,3 are over and that 4 is turning into a flat… could you be kind enough to give a count suggestion on this C…
p.s. if time does not permit a detailed view, please be kind enough to post a quick chart with your “probable” labelling.
thank you.
hi ramki, looking at the weekly chart, does it not appear as if as of now only A of ABC is developing. Also, this A has made a 1 (6335.9 to 5690.35), 2 (5690.35 to 6181.05) and 3 (6181.05 to 5177.7) and as of now wave 4 of A is underway… this suggests that we may be in for a far deeper correction which is yet to see wave B and wave C of this ABC. a quick comment highly appreciated. thanks.
Dhiraj, You are probably right. My labelling of the correction in NSEI was tentative, just to show the direction. Remember I was calling it down as it was going up, which few people would do. If we complete a 5 step wave A, the prognosis is for a deeper correction. If we complete a zig-zag, followed by an X, the outlook is the same.
Ramki Sir,
Nifty has taken approximately 16 trading days to reach 5608 from 5178 ( abc ).
Also it is forming a Contracting Triangle between 5608 and 5374 for the last ten trading days (x).
To reach the upside target how many more trading days it will take.
Also market took 28 trading days to reach 5178 from 6180.
Please help me to understand
Hello JJ,
I know there are some interesting examples in my blog where I have used the number of days to showcase the cycles. However, it is not a very reliable indicator. I would seldom attempt to project when a turn would happen.
Ramki Sir ,
Looking at todays action in Nifty please advice about the chart as we already hit 5680.
regards
Sid
Hi Sidharth, I am currently on holidays in India, and will take a look at the earliest opportunity. On balance, I am not changing the downside target for Nifty. Maybe the route will be different!
NIFTY TODAY MADE A HIGH OF 5667 AND CLOSED AT 5654. HEADING TOWARDS 5680 AS PER YOUR POST DATED 20.02.2011. LETS SEE WHETHER IT PETERS OUT HERE OR AT YOUR OTHER LEVEL OF 5895. SIMPLY SUPERB…..
Ramki sir,
Hope you are enjoying ur vacation. So far nifty is following as per your chart. I am curious to know about timeframe either to reach 5895 or 4800 levels. I mean if i want to enter at this stage, which is better long or short. If i buy nifty for april expecting 5800+ and whole month it trades in 5300-5700 and goes to 5800+ in May or June and fall from there? or vice-versa. If i short @ 5680+ levels in April series and trades whole month in 100-200 range and falls in May/June? Is there any way to know likely timeframe to achieve the target.
Hello Ravi
Thanks for your post. As you know, Wave Times is not offering trading advice. It only gives you ‘ideas’. Anyway, it is usually very difficult to specify a time frame within which a certain target will be reached. So if you are working with options, you should know which wave we are currently in. A 3rd wave or a C wave will cover the distance quickly, for example….
Hi Ramki,
One quick question – the orange ABC shouldnt that be wave 2 of one degree higher? If you are still expecting downsides what are you marking the v of red 5 that ended in November in the next degree? I’m an elliot wave learner.
Thanks in advance.
Best regards,
BJ
Hello BJ
I am currently working on the premise that a 5-wave move from Q4 of 2008 has been completed at the top. (These 5 waves are marked 1,2,3,4,5 in red). The wave v that you ask about is the fifth within the fifth. Once a frive wave sequence is completed, we should look for a correction of the entire move. What we have seen so far is incomplete. The first 3 wave downmove is being corrected now. As no one can be sure what form the correction will take, one has to take intro account other factors to make an informed decision. My current approach is to look for a double zig-zag. The first ABC is over. after a corrective X wave, we should look for another ABC. If you are a long-only investor, you should wait for the low-risk levels i mentioned before buying. Good luck.
Ramki sir,
as per your nifty outlook, corrective wave ABC , C ended 5177, as per my count again corrective start at 5177 as a A , wave B may closed anytime between 5680 to 5895, and wave C is downward as per your level its correct or wrong .
by swaminathan
Hi Swami, I am afraid I dont understand your question. Can you re-phrase it?
Hi Ramki,
I think I get what Swami is trying to ask. Swami, B legs are always a “three”, if you label the entire decline from 6339 to 5177 as “A”, the move from 5177 to 5700+ has 5 legs and hence cannot be an ongoing B. If you want to label the ongoing move as B, the low of Feb should be labelled as A. Am I correct Ramki?
Best regards,
BJ
HI BJ
Wave Label A @ 6339 to 5177 ( 1162)
Wave Label B @ 5177 to 61.8% retrace of wave A distance that is 5895 ( Ramki sir already said one )
Wave Label C progress later
I am doubt about 5895 if Hit or Not
thanking you
swaminathan
Swami, if wave A is made up of 3 sub waves, then a potential wave B should tend to go back to the top, ie 6339 as a “flat”. I have suggested that we finished the first of a double zigzag. This means a set of ABC is over. So the two kinds of labeling has different interpretations for the future outlook. One can label the waves anyway one wants. He/she will know the correctness only later on. I wouldn’t spend so much time discussing a potential move and how to label it.
We anticipated a recovery to 5895. If it goes higher we will reassess.
As per your chart
corrective wave A @5690 , B @ 6180, C @ 5177
as per My new Corrective count is A @5177 , B @ 5680 to 5750
C @ 4800 ( it will come later ) as per your level
My count is correct or wrong sir
Nifty made an intra day high of 5872…..(your projection 5895…very close)….lets see if the rally fizzles out here
Thanks for keeping me updated Vidhan, because I often forget what I write in my blog (there are just too many ideas there). I suspect that TCS too will top out around the same time, and come off pretty fast. But will confirm this when I return to Kuwait this weekend.
Ramki sir,
Please advice on nifty when you get time.
Regards
Sid
sir, today nifty breach 5900. now whts d view abt nifty ?
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Hi Ramki,
Can you take a look at Nifty now? Prices have overlapped today into the Feb 2012 high. Does this make the move from 4770 an abc of a bigger B? And current move from 6111 sub waves of bigger C?
Please comment or post when time permits.
Thanks in advance,
BJ