APOLLOTYRE - Wave 4 near support levels - Opportunities for long

After finishing impulse wave 3 in mid-October, APOLLOTYRE has found itself in correction mode (wave 4).
Although the price decline in wave 4 has been fairly steep, we cannot deny the fact that it is close to 50% retracement level of wave 3. Further, as indicated by the shaded green region, zone 190-195 is very critical for further movement.

If the stock gets support in this zone with sufficiently large volumes, it is quite possible that price may rebound and we get into wave 5. However, it is very early to say so. Price action in upcoming days will give us further hints regarding where the stock is going to.

In case it does get support and we get into wave 5, the target to look for is Rs 250 - (previous top around 30 Jan 2015). However, trade set-up would get invalidated if wave 1 top @ Rs 180 is broken. In that case, we may be looking at the potential development of a head and shoulder pattern.

Nevertheless, it is worth having the stock on one's watchlist.

Please share your feedback or insights in the comments section. I would be very grateful.
Happy trading !

Nikhil Ghodke
Indian Institute of Management, Indore (IIM-I)
Mob 7719034978

Trade active:
In the last three days, APOLLOTYRE tested its support at 183 (which is the wave 1 top, as mentioned in the post). The price level was tested three times, as seen in the 30-minutes chart, after which bears finally joined the bulls and helped take the price back above 190.

Trading strategy: Look for re-entry around 185 with strict SL (or short hedge) below 182.
Target 1: 210

Note: Trade only at the key levels, avoid intermediate positions.
Comment: APOLLOTYRE breached the key level of 182.

Stock slips below key level - and falls further 4-5%
This is why strict stops are very important.
Trade closed: stop reached


@NikhilGhodke - Hey Nikhil, I see that wave 4 had a low below the top of wave 1, do we consider price action only on the closing basis or could it be considered as violation/exception of Elliot Wave theory?
NikhilGhodke SaurabhMehra

Hii, the low you are referring to is on the the day of US election results - a day of extreme volatility. I would not consider that as a part of the wave/pattern as it is an exception. If the top of wave 1 gets broken now, or in the next few days - I will consider pattern as invalidated.

However, if you see today's price action - APOLLOTYRE recovered fairly quickly once it hit 182 level. Not only this it bounced back and hovered above 190, finally to close above 186. For me, its still in the marked zone.

As SGX Nifty is indicating, we'll likely have positive opening tomorrow and APOLLOTYRE will come back to its support level.
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