Every few days I am reminded of the power of Elliott Waves. Illustrated below is how I anticipated a down move of at least 20% in an Indian Stock.
You would remember from my Elliott Wave book “Five Waves to Financial Freedom” that when a fifth wave extends, the correction that follows often tests the sub wave 2 with that fifth wave, and quite regularly goes even lower to reach the prior wave 4 low. On 30th December 2018, when I looked at Karur Vysya Bank stock for a client, I saw the portends of a further sell off. Already the stock had come down from its September 2017 high on 136.54 to around Rs 74 by October 2018, a move of over 45%. The recovery back to its then current levels of around Rs88 seemed part of a correction. So I placed an alert of my Thomson Reuters Eikon system to email me when the stock breaks its prior lows of Rs 74, so that I can evaluate how much lower the stock can go. See this email I received today.
Below are a couple of more charts to help you see how I look at the waves!
Only issue with above Wave counts is that Wave 4 is entering into territory of Wave 1 which is one of the key principle of Elliot wave nicely explained in your books and here it seems that rule getting violated.What are your thoughts for same?
Prabh, You are right in your observation. One could also say that the so-called wave 5 looks to be in 3 waves. What matters at the end of it all is how we deal with price. But that does not mean we can allow the rules to be flouted when it suits us. This particular case will remain a mystery for me, and will have to be marked as a suspect.
I have small query on counting. Can we count the Sep’10 high as the wave 3 and Jan’13 as Wave 5 and the correction after that till Aug’13 as the ABC correction completing the cycle and the next set of 5 waves starting from Aug’13 to Sep’17.
Is there any mistake in the way I do this counting.
Kannan, Wave counts are the means to an end, which is to be profitable. My workshop will go deeper into this aspect
Sir on trading view.com this chart is different. Plz check it.
Udit, Thank you but I have no control over the data whether it is from Thomson Reuters or from Trading View of any other website. This free blog exists to help traders learn Elliott Waves! So the concepts are more important. All the best.
I got inspired from you to learn Elliot wave and trying to understand.. first found in charts about LTfinance (larsen and tourbo finanace) , I have seen the monthly charts of since 2012 when company is listed and noticed that this share is in wave 4 and completing their correction, Could you please check that am I on right track…Thanks in advance sir
Hello Karan, Thank you for your message. Unfortunately I am unable to do what you requested because I get too many such requests.All the best