Gujarat Gas Ltd – A Major Correction Nears Completion

After a volatile two-year decline, Gujarat Gas Ltd (NSE: GUJGASLTD) may be approaching the final leg of a prolonged corrective structure — a setup that aligns beautifully across both monthly and daily timeframes.

The Bigger Picture – Monthly View
From the 2016 lows near ₹94, Gujarat Gas advanced in an impressive impulsive manner, peaking around ₹786.
What followed has been a deep and time-consuming correction that unfolded as a double zigzag (W–X–Y) structure.

• Wave W bottomed at ₹403.55 in early 2021.
  
• Wave X retraced sharply to ₹689.95 — a typical counter-trend rally.
  
• Wave Y then extended lower and now appears to be terminating near ₹360.
  

This region coincides with the 0.618 Fibonacci retracement of the entire 2016–2021 uptrend, an area often associated with exhaustion in larger corrective waves.
Price action has also turned subdued, with narrower candle bodies and waning momentum — a sign that the multi-year correction may be approaching completion.

Zooming In – Daily Structure
The daily chart reveals the internal five-wave pattern within Wave C of Y nearing its end.
The final sub-wave (5) has reached a confluence between 0.618 (₹411.7) and 0.786 (₹389.1) retracements, forming a technical Buy Zone.

However, traders may consider waiting for bullish confirmation before acting.
Watch for reversal signs such as Hammer, Bullish Engulfing patterns to confirm that buyers are stepping in from support.

Importantly, the RSI shows bullish divergence — a classic sign that downside momentum is losing steam even as price makes marginal new lows.

Confluence and Context

1. Structural Alignment: Monthly W–X–Y correction appears mature.
   
2. Fibonacci Support: Key retracement cluster at ₹389–₹412.
   
3. Momentum Shift: RSI divergence adds conviction.
   
4. Price Trigger: Wait for bullish candle confirmation from the Buy Zone.
   
5. Risk Clarity: Invalidation below ₹372.
   

Together, these factors indicate that the correction could be ending, setting the stage for a medium-term trend reversal.

The Road Ahead
If price sustains above ₹440–₹460 after a confirmed reversal signal, it could mark the beginning of a new upward phase — potentially the start of a larger impulsive leg.
Failure to hold above ₹372 would, however, invalidate the bullish case and shift focus back to ₹340–₹360.

In essence: Gujarat Gas is positioned at a confluence of structural, Fibonacci, and momentum supports — a zone where long-term corrections often end and new trends begin. Confirmation through bullish price action could validate the start of a new recovery leg.

Disclaimer: This analysis is for educational purposes only and does not constitute investment advice. Please do your own research (DYOR) before making any trading decisions.