one of the greatest advantages of using elliott wave analysis is prediction of market direction and its likely behaviour much earlier for taking medium to long term investing/trading decisions. the flip side is due to its complicated nature one cannot be very sure if its the right count or analysis one is making and if it is terribly wrong then one can also lose a lot if proper exit lvls are not kept.
so anyone reading this ew analysis is requested to do own study and maintain own discretion.
i had expressed some doubt on B completion and opening of C down of second zigzag ABC in ABC-X-ABC formation after january 2008 in dire straits.
now looking at the degrees of waves present within the 3790-4650(4637) upmove, it does look like B is over and C is on, if this is so then recent high 4650(4637) will be the intermediate peak in short term and rally now to be used to exit long positions.
internal structure within wave C:
sub-wave C-1 has ended at 4203.55 with internal waves i,ii,iii,iv,v shown as in above chart,
C-2 upmove is on with tgt 4370-4472(a striking similarity to the tgts according to my previous post http://valuetrading.blogspot.com/2008/08/magic-of-channels-trendlines-and-moving.html,
then C-3 will open down with a tgt 3770(taking 2 end as 4472),
then C-4 up from 3770 takes it to 4040,
then last sub-wave of C i.e C-5 opens down to tgt 3550-3606, again a striking similarity with tgts achieved by my techno-fundamentals i.e p/e chart http://valuetrading.blogspot.com/2008/08/nifty-pe-chart.html.
(note: even if iam wrong in considering C is going and making projections on the downsides and by chance if B is still on, even then its limit is 4770 since B in a zigzag will not exceed 61.8% ret of A, a move above that now will call for a change in my current ew counts and will change the larger outlook on market, till then just enjoy reading)
-abhay r somkuwar.
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Sunday, August 31, 2008
my latest ew update...
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6 comments:
thnks ab sir for your chart and nice explanation on ew n hope u post your opinion on ew more often.
Dear Mr. Abhay,
Thanks a lot for neat, informative and very nicely presented views on Indian market.
I have asked two questions and pointed out some typos, below.
Questions -
1. At this juncture it is not clear whether wave C has begun or wave B is still in progress.
So, if somebody is long in the market, what stop loss do you suggest, so that person is saved from brutal wave C.
2. At two places, you have mentioned 4637 in the bracket. What is the significance of this figure/level ?
Typos -
1. You have written - ..... sub-wave C-1 has ended at 4203.55
It should be 4201.85
2. You have written - ........ then C-3 will open down with a tgt 3770(taking 2 end as 4772)
It should be 4472
3. In the last paragraph, you have written - ...... and by chance if B is still on, even then its limit is 4770
It should be 4723
Thanks once again for your blog. Please keep up your good work.
With Regards,
Hello Abhay, Nice to see your update...Pls do post your thoughts more often! :)
Some thoughts of my own...been watching this market with a lot of confusion past few days...waves morphing always do this..we have doubts on IF its the bigger B up(means A, B over, C to open up within the bigger B)..and then only C opens down...OR the possibility you have mentioned..Tough to call at this point...I am still net short positional from 4400 but in 2 minds on wether to close it off and maybe short later...
If you can, can you also show how you are labelling the bigger B wave?
Best
Lee.
many thanks anonymous,praveen and lee.
thanks very much praveen i do make lot of typing mistakes. either recent low 4200 or just below 4160 the low of b of B of second ABC is a good stoploss i guess on closing basis(if C-2 is still on it should not correct below 4260 so thats a support for longs). the nifty figures of low 4203 or high 4637 are actual ones during trading times, nse recorded slightly different ones. yes 2 end should be 4472 its a typo. regarding chance of B still on then limit read as 4723-4770 bcoz 4770 a caution lvl is a very imp figure i.e 38.2% ret of total fall from 6357-3790.
regarding lee's doubt whether B is on or C on, i guess its pretty clear. some guys giving analysis consider total fall from 6357 to ongoing as 5 wave pattern without explaining anything(i doubt if they know anything about it or not or just posting whats their ew s/w is telling them lol) i.e 3 waves down and 2 waves up, naturally the downward waves will be motive ones with internal subdivisions of 5 and upwaves will be internally sub-divided in 3 waves each:) thats why degree is important here if we find uptrend continuing and makes 5wave upmove here from 3790 then upward impulse means a completely different wave structure! on the other hand some people like me prefer correction from 6357 as ABC-X-ABC i.e complex corrective the second ABC which is forming a zigzag pattern, hence expected B of this consisting of 3sub-waves, same as the above conclusion.
small waves do confuse lot of times and short term trading may also become difficult. there is a grey area many times on 5 wave up formation in correction it may just be 3 waves up and the next 2 waves in next downfall coming, so many time some ew analysts how they adjust they label the 5 as failure since its lower than 3 ending and then follow it 3 with wave downmove correction lol, u know what can happen next on further moves thereafter to their labelling:). so why confusion when ew says correctives sub divide into 3's and impulses into 5's its the very basics of ew analysis isn't it?
i may be awfully(100%) wrong too regarding my analysis here and might have said something incorrect things also but thats what's coming at first instance to my mind and so frankly just i typed it down, if some other things click me then will surely post here. pls ignore small typos they occur all the time with me lol. since the reply has become lengthy, i will try to post it as a new post on blog when i get time, pls also give ur views/opinions on elliott waves there. thanks again.
chalo bye,
regards
cheers!
-abhay r somkuwar.
Hi Abhay,
What I am thinking and talking about is on my blog -
http://www.theindianmarketblog.blogspot.com/
pls visit the same and let me know what you think...We are pretty much on same page...Its only the minor level waves where we have some confusion on.. :)
Best.
Thanks Abhay.
With Regards,
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