I realize that some of you are wondering about what I think about TCS now that we have rallied to a new high this year. Recall that I was talking of a significant downmove in this stock. However, I wouldn’t be surprised if you didn’t remember that my call was more of a medium term in nature. Unlike in DLF, where although I was pointing to the south and it went up instead, in the case of TCS I continue to suggest that we will see a move down to around 835 in the next 12 months. The reason is quite simply that we are in the final stages of an extended fifth wave, probably in the fifth of the fifth, so it is just a matter of time before the bulls will suffer from exhaustion. So if you are an investor, you should prefer to take profits on most of your holdings of this stock, and wait for a more reasonable level to buy it back.
Update on 29 August 2019:
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22 Comments
Hello Ramki, in review of your April 7 post regarding TCS, is wave 5 up complete on April 21? If so, then the decline to 1108 on May 5, does this wave have a impulsive declining five wave structure. If so, from the intraday high of 1245 to the May 5 intraday low of 1108 would calculate 137. A 50% retracement of 68.5 points suggests looking to ease into the short sale at 1176-77 with a potential target of 835. (1245 – 1176 = 69 potential loss versus 1176 -835 = 341 potential gain)
Bob, Thanks for reminding me about this stock. Once I write something, I leave it to diligent readers like you to follow up and tell the world whether it worked out or not :)- Anyway, regarding TCS, it does look like the 5th wave finished at the target of 1245 outlined in the post. However, what is unclear is whether a full 5-wave downmove is over. If we recover 50%-61% of the range from 1245 to whatever is the low, then one should get ready to sell. There is no change in the M/T call for a decline to the target of 835. Stops have to be placed above 1250 now.
Sir, What are the odds of DLF having completed a long term Wave 2 pattern. Wave 1 pattern seems to have formed, beginning from 124.05 (intraday low) completed on Feb 4,2009 to a intraday peak of 519.90 on Oct 23,2009. And the corresponding correction is in 3 waves from the peak of 519.90 to 208.50 (intraday) on Feb 25,2011. And there seems to be a 5 wave decline in Wave C (part of Wave 2) from intraday high of 397.50 on Oct 04,2010 to an intraday low of 208.50 on Feb 25,2011.
Ganesh, I don’t think 208.50 level you see is correct. Secondly, I was bearish on DLF in an interview with Deepak Shenoy. Unfortunately, the timing was wrong. It is still too early to speak of preparing for a 3rd wave, although it doesnt matter to me whether it was wave 3 or wave C, all I need is a good rally. When to buy is the more relevant question, and the answer is ‘not anytime soon’. PS> THis question should not appear under TCS!
Just thought of highlighting another great stock for analysis with a potential to short. ABB. Seems to have done a 5 wave decline and a magnificent retracement of nearly 80%. Looks like another 5 wave decline as part of Wave C is in store.
Ganesh: Fair disclosure: After a long long time, I had recently purchased ABB looking for a 6% upmove!
TCS IS HOLDING 1050 LEVELS SINCE LAST SIX MONTHS , ON THE VERGE OF CRACKING. JULY PUTS AT THE STRIKE PRICE IS AVAILABLE FOR RS 10.
Sir,
Have you looked at REC (rural electric corp) stock, seems to be in classical down wave. May be the last leg. Your views, if you could please share..
(is this a wrong place for post..?)
Dear Mr. Ramki,
I am of the many readers, who eagerly await an update on nse or gold or any other stock. Besides these being of my interest, I also enjoy reading other topics eg. silver, or crude, foreign currencies. etc. Each of your article irrespective of topic being of my intrest or not, brings up new learnings. Finer points are highlighted/ explained which I doubt are rarely taught in any of the courses.
Thank you for sharing your knowledge!!
God bless you!!
Dear Ramki,
I asked you that question on TCS since I was seeing a LED similar to the NZD example shown in your book, except that this is occuring in a higher time frame and at the A wave or wave 1 position. Is this a valid interpretation?
Hi BJ, Can you post your question again, as I can’t find it! Anyway, I continue to remain bearish for TCS even though we did come down by 25% before the recent recovery.
Dear Sir
After making a low of 902 it retraced till the levels of 1145 levels before the results.
And Cracked 8% on the day result was announced. Is it a good time to short @ Current level coz it has retraced almost 60% of the entire fall.
HI Abhishek, The stock has actually failed at the 70.7% retracement level. As explained elsewhere, at present I am not giving trading advice to individuals. Good luck!
Dear Ramki,
I recently bought your EBook. After going thro’ it, it’s fair to say that it is one of the most easiest yet comprehensive & practical teaching of EW I have come across. I am glad I bought this book. I came across this analysis on TCS based on the reference in your book. You were so right on TCS going down. I have a query. Based on the current chart of TCS, I think TCS has finished ABC wave. It has started again 1-2-3-4-5 wave again. I think it is in the 3rd wave now. Please let me know if my analysis is wrong.
Thanks,
Prash
Hello Prash, Welcome to the Club. I suggest you read the book again carefully, and learn more about the wave personalities. About TCS, I am beginning to suspect that bulls are being led into a trap. Let me give you a scenario. Suppose we go back to the prior high, or even break above that and touch 1274, and then come down to trade below 1150, then I think the party is over, and we will be looking for a 25% loss in value even from 1150. There are other scenarios, but this is the first one that occurs to me now.
Dear Ramki,
Thanks for pointing out. You were right, I had made my observation before starting the chapter on ‘Wave Personality’ :-). After having read that and relooked at TCS chart again, I have different query. Do you find the supposed ‘Wave 3’ is suspect because of comparison to prior slope of ‘Wave 1’ (as mentioned in your book) or you reckon the top of suspect ‘Wave 3’ may be an ‘X’ wave in formation and we may turn around quickly.
Thanks,
Prash
Hi Ramki,
I read this chart because it was quoted in the book while reading chapters ‘Wave Personality’ and ‘Magical Moments’. I also watched the video that you have for this chart. Must say priceless to have you walk us through your analysis. I went back and referred the chart as to what happened till date. The stock did fall as you had expected. Whew, you are genius! The stock however did rebound from around 900 and seemingly trying to form an impulse pattern. From what I read in one of your comments to your reader, you suspect that rally. Please let us know your thoughts as to why you expect this rally to be suspect. Is it because it hasn’t corrected fully upto 835 or is there any other perceived weakness that we need to be aware of?
Thanks,
Arian
Hi Ramki,
TCS and Reliance have been the toughest to label in the last 1 year. It is for such complex structures we would need your vast years of experience using EWP. If you could put out a note on Reliance and TCS it would be most educative and I would be very grateful. I’m sure you would agree that reliance has been a tough one to label on a weekly time frame though have managed to trade it short term using the techniques shown in five waves to financial freedom.
Best regards,
BJ
sir,
looks like TCS needs a re look.
As it has two extended waves , we can expect a irregular flat, and 123.6% of a=1335
and 138.2% of a=1370.
and we are close to 1335.
would you please do minor subwave counts for us .
Hi Ramki,
I am an avid follower wavetimes.
Could you please post an update on TCS.
Thanks
Hello Ramki,
Is this rule valid only in case of extended fifth wave?
Thank you And Regards,
Giuseppe
Giuseppe, This is not a ‘Rule’ but yes, this behavior works best at the end of an extended wave 5.