How to use "Channel Tool" on the Price Chart and its technique?On the price chart can be draw in parallel lines. For example, prices come right in front of you. If this is accurate and if I call the channel of the true value you draw. No, see if it is contained by parallel lines.
It is a reasonable price, the price of the action counter train is contained by the action parallel mind, so if the price action is not contained by the parallel lines by default.
For example, let's look at an impulsive structure. Here we have Waves 12345, just an excellent Elliot Wave Impulse move. Now let's look at it from the channeling technique.
The first thing we want to do Pull back when I call the "Base channel" and it will be this channel here. We start from the origin of wave 1 to the extreme of wave 2 and then take it to parallel to the extreme line of wave 1. The move at this point. We now believe in clarity that we are rallying in the third wave step.
Next channel. Whenever there is a lower boundary line on acceleration for the importance of acceleration channel I will call the "Acceleration Channel" which you draw from the extreme of wave 3 to the extreme of wave 3. The channel entered into its signals and confirmed that there were the wave 3 is complete. And, the wave 4 is under way.
At that point, we draw a "Deceleration Channel" that defines the parameter of the wave 4.
if we go back and look at the base channel, what I found out using this technique is that the trend line that forms the base channel often provides support for the wave 4 and then ends at the break of the boundary line above it. Wait until the correct price channel is on the bearish channel. Then we look at 5 ways to develop an idea. If you have three waves it is very easy, you argue that you can usually only draw one price channel and that is the signal on the price move. If your check is a counter-turn price move if you watch 5 waves, you should be able to draw 3 clear channels on it. So 3 waves, one channel, 5 waves, 3 channels. Well, now that I look at this price chart, well, what do you have? There is a move upwards, which is contained in parallel lines. It's a counter-train move. Thus we can expect more than to withdraw completely. Now go to the downside.
Best of luck.
Regards,
Chitroda Dharmik.
Elliott Wave
CLASSIC ELLIOT WAVE PATTERN AND TRADE SETUP LOGICPost covid IDFC FIRST has been moving up in an impulsive manner.Impulsive move advance's price in 5 waves of which 1,3 and 5 are in the direction of primary trend and 2 and 4 are counter trending.
Elliot wave Patterns discussed in this chart and it's rules.
*Elliot wave impulse pattern and rules:
#Impulse pattern
1)Wave 2 doesnt retrace wave 1 completely.
2)Wave 3 cannot be shortest of wave 1,3,and 5
3)Wave 4 should not enter wave 1 price action zone or wave 2(incase wave 2 being an running flat correction ).
#leading diagonal
Leading Diagonal:It is variation of an impulse pattern where in we see 5 wave advance in the direction of primary trend but rule 3 of impulse pattern is not followed by wave 4 and wave 4 enter's wave 1 zone.Rest of the impulse rules remains same.It can have internal structure 5-3-5-3-5 or 3-3-3-3-3.
#Extention
Extention pattern is nothing but any motive wave sub-dividing itself in 5 sub-waves of smaller degree and extending either of the motive wave by at least 161%,in this case we can see this happening in wave 3.(a classic pattern)
*Elliot wave Corrective pattern and rules:
#Flat:
1)It is a 3 wave (A-B-C) pattern,in a counter trending direction.
2)It has internal structure of 3-3-5.
There are many variation of FLAT correction depending upon wave B and wave C's length.One of which is Flat with truncated C which is seen in this chart and discussed below.
Truncated Flat:It is a variation of elliot wave corrective pattern called a FLAT correction which has 3 sub-waves(A-B-C) of almost equal length in the opposite direction of primary trend having internal structure of 3-3-5.In truncated wave C FLAT,sub-wave C doesnt retrace sub-wave A entirely by 100%,indicating strength in primary trend.
#Triangle:
Triangle is corrective pattern with 5 leg's in the form of A,B,C,D,E.Triangles are generally seen in wave 4.It has internal structure of 3-3-3-3-3.There are 3 main variation of triangle pattern ,regular triangle,expanding triangle or neutral triangle.Over here we are seeing either expanding or a neutral triangle.But i am only specifying rules of neutral triangle over here reason for which is discussed in detail below in analysis part.
Neutral Triangle:
Here wave C is longest among wave A,C and E and hence instead of A-C we connect C-E trendline in triangle formation.Triangle's are tricky pattern to trade.In classic technical analysis a head and shoulder pattern top or bottom represents neutral triangle.
Following patterns are observed in this chart:
Wave-1)Leading Diagonal-we had 5 sub-wave where in wave 4 was over-lapping wave 2.
Wave-2 ) ABC FLAT with Truncated C,meaning wave C didn't achieved it's regular flat 100% wave A extention target,indicating strong momentum in wave 3,also wave 1 was only retraced by 38% which again indicates wave 3 will be extended.
Wave-3)Classic 261.8% extention of wave-1,nothing much to explain as it's a text book elliot pattern where in momentum is strongest.
Wave-4)Triangle(either neutral or expanding),again a typical elliot 4th wave pattern where we see prices correctiong in 5 leg's A,B,C,D,E each internally sub-dividing in 3 waves giving entire structure 3-3-3-3-3 internal structure.
Analysis:As of now we are in wave 4 in primary degree,making either of the above mentioned triangle.So far we have already seen 4 leg's of this triangle and wave E is going on.In this wave E we are done with wave A and B and currently wave C is going on.I am considering this wave E as a regular flat.
Reason behind wave -4 to end near 44 levels.
1)100% wave A extention target of wave C for regular flat correction in wave E of triangle is coming @ 44. 05 INR
2)We also have 61.8% retracement of entire primary wave 3 coming @ 44.95
3)Add to it we also have intermediate wave 4 low of primary wave 3 @ 43.50 odd levels
4)lastly we have raising trend-line connecting triangle's wave C low's and wave E's sub wave B(not shown) coming at 45 odd levels.
This are sufficient evidence for priamry wave-4 to end near 43-45 levels.
Trade setup
1)For Conservative trader:
One can go long once the B-D trend-line of triangle get's broken which is coming at 50 odd levels with a initial stop-loss of wave 4 low's and expect wave 5 to be of equal length of wave 1 giving us price target of 61.Risk reward would be 1:2 expecting wave 4 ending @ 44-45 levels.
2)For Aggressive trader:
For some one who is aggressive can take long's once we get reversal candle in our target zone of 43-45 on daily chart meaning a morning star , hammer , bullish peircing, bullish engulfing candle sort of candle.Stop-loss would be same wave 4 low,however in this case we would be showing commitment before market commits itself but then one does get better risk-reward by entering early.Here also target will remain same of 61 but risk reward will be better compare to 1st scenario.
One can even add momentum indicator and a short-term moving average for further confirmation in order to take entry .
PS:Analysis shows classic text book elliot wave pattern and it's characteristics which is very rare to find on practical charts,hopefully this post help's someone who is learning elliot wave theory.We are also seeing alternation between wave 2 and wave 4 interms of price,pattern,time and retracement which is again a classic impulse characteristic.
Disclaimer:Analysis provided here is for educational purpose,trades should not be taken solely on its basis
Real Time example - TRIPLE ZIGZAG (Bullish)Let's talk about each waves of Triple Zigzag:
Wave W (5-3-5) impulsive: ((a)) = ((b)) at 17709 which is close actual low 17613. Its a sharp zigzag.
Wave 1X corrective: Wave ((b)) 3-3-5, Running Correction which is little complex.
Wave Y (5-3-5) sharp: ((a)) = 0.786 ((b)) at 16824 which, is very near actual low as 16782
Our first question is, What is the Zigzag?
In chart, a, b and c is zigzag which very easy to understand by picture.
Its really easy to understand this wave counting if you read just below basic rules and Characteristics of Zigzags. The main question, What is going on in nifty? This Triple Zigzag is bullish pattern. Really market is follow this pattern? - Wait and Watch...
Characteristics of Zigzags:
— labeled a-b-c
— subdivide 5-3-5
— typically occur in wave 2 position
— ‘b’ wave does not approach ‘a’ wave origin
— ‘c’ wave ends beyond ‘a’ wave extreme
— belong to ‘sharp'
Rules:
- Wave A always subdivides into an impulse or leading diagonal.
-Wave A always subdivides into an impulse or leading diagonal.
- Wave B always subdivides into a zigzag, flat, triangle or combination.
- Wave C always subdivides into an impulse or diagonal triangle.
We can use channel for zigzag. The Wave C often ends upon reaching the extreme of the channel.
Trading Research - INFY (Triangle) Sell SetupNOTE: SHORT SELLER MIGHT HAVE MUCH RISK BECAUSE OF GAP UP WAS OPENED ON 16 DEC. 2021
INFY 4hrs continuation chart with 5 waves up and side wave trend.
Possible also upside move instead of WYZ flat pattern but if we just look at WYZ flat pattern scenario 1725 and 1692.
Look for equality, I come to exactly 1660 where wave Y equals W.
One of the waves within triangle, usually we see wave E triangle that why I assume here ABCDE triangle of wave ((E)).
In-front of you chart of INFY, its a short term chart and with low 1311 & high 1848.
This is how I view the basic of wave count, roughly. This is easy technique to identify the waves and count them correctly.
IEX:Elliot wave labels+analysis+trade setup+observationsIEX is showing impulsive rise post covid low's.Currently we are in Primary wave 5 (which has taken a form of ending diagonal as it's 5 intermediate wave has 3-3-3-3-3 internal structure)intermediate wave 4 minor C,which can end near 200 odd levels.
Following are the reason for intermediate wave 4 to end around 200-206 levels.
1)100% extention of minor A for minor C is coming @ 199
2)Intermediate wave 2 price action zone is 206-190,wave 4 in ending diagonal does enter and end in wave 2 price action zone.
3)We have raising trendline connecting primary wave 2 and primary wave 4 lows coming @ 190 which will keep on increasing there by giving us a zone of 190-200 as probable support.
4)we have 200 day ema at 180,and by the time we form wave 4 low's this too will rise towards 190 odd levels which can act as support.
Analysis:
So as of now we are in Primary wave 5 intermediate wave 4 minor C,meaning we can see current fall taking prices towards 200 odd levels,from there we can still get a last push on the upside in the stock in the form of intermediate wave 5,however this is the least ideal time for taking a long entry still for short term trader with pre-defined exit one can expect 10% move on the up side once price reverse's from 190-206 zone giving us a final target of 220.Stop-loss for this trade would be the intermediate wave 4 low's,trade setup criteria is discussed below.
Trade setup Criteria:
Again for entry one needs to have bullish reversal candle along with price crossing 9 day ema and breaching 2-4 trendline of minor wave C.Momentum indicator can be used to check oversold levels.Enter once price follows this criteria after entering 190-206 zone,and keep the reversal candle low as initial stop-loss for an upside target of 220.
Observation:
Wave-1:Leading diagonal
Wave-2:Regular flat
Wave-3:200% Extention of wave 1
Wave-4:Running falt
Wave-5:Ending diagonal.
Alternation between wave 2 and wave 4 is seen in terms of prior wave retracement,price,pattern and time.
Disclaimer:This are just my views on this stocks,no position should be build or exited solely on its basis.I am putting this analysis for my future reference.
METAL INDEX: BullishMETAL INDEX: Formation of HH HL on daily time frame. Bottom formation is done in metal index. We need to see impulsive price action to confirm for a new high as a continuation of the larger uptrend. Till then it is confirm that there should be a bounce at least in all metals. STOCKS TO WATCH: TATA STEEL (MY FAV.) , SAIL , HINDALCO , jindal steel is also about to turn, but there is a possibility of one more low
Scenario - 1 (Ending Diagonal) Trade Setup technique(live)...Before getting started for high opportunity Trade Setup. Let's understand the about Diagonal.
What is exactly Diagonal: It is a five-wave overlapping structure, wherein each wave subdivides into three smaller waves. It is typically an ending or terminating wave pattern and is found in the fifth wave position on an impulse wave and the wave C position of A-B-C formations. A Diagonal Triangle is normally contained by two converging trend-lines. A Diagonal Triangle is normally contained by two converging
trend lines.
Rules of Diagonal:
A Diagonal Triangle is made up of five waves.
Each wave within a Diagonal Triangle must subdivide into 3 waves.
Wave 3 cannot be the shortest impulse wave of waves 1, 3 and 5.
Diagonal Triangles can only occur in the fifth wave position of impulse waves and the wave C position of A-B-C formations.
Diagonal Triangles are found only at the termination points of larger wave patterns.
This is earlier considered Ending-Diagonal for multiple reasons. One of the reasons is, we will get higher reward than risk in short side. Let's assume that wave B of (iii) of diagonal end 17269 nearby and then target is has high reward for wave C of (iii)wave.
Calculation:
17490-17269 = Risk 221 points
Reward 595 points = 17269-16674
Aggressive trader or a trade who are able to risk can sell 17190-17260 is best levels but safe traders can enter 17270 on side of short selling. I will also update follow up time to time on this post.
how to trade through elliot wave First thing to do is to identify the time frame that one is comfortable for trading or investing there money for,accordingly one should select time-frame for labeling waves.Here i have tried to label from cycle to minor degree.Analysis below is targeting Primary degree wave 5 upward movement that might unfold in near future.
As mentioned in every book or article on elliot wave theory one should start labeling from an important low or high,hence i have taken covid lows for reference.I have tried to follow impulse labeling rules given in elliot wave theory and have labelled degrees according to time frame given in the books or in the material available online.
Reasons for impulse wave counts:
1)Primary wave 2 has not retraced primary wave 1 by more than 100%
2)Primary wave 3 has extended almost 261.8% of Primary wave 1
Current wave counts
Cycle : wave 1
Primary : wave 4
Intermediate : wave C
Minor : wave 5
Current Struture
Primary wave 4 Regular Flat ABC correction(3-3-5)
Logic for Demand zone between 284-266
1) Price support @ 284
2) 100% Extention of Intermediate wave A from wave B top @284
3) 38.2% Retracement of primary wave 3 @ 269
4) 123.6% Extention of Intermediate wave A from wave B top @266
5) RSI seems to be making positive divergence
Entry Signals
1)Look for bullish reversal candle like Doji,Hammer,Piercing,Engulfing pattern in the target zone marked for Primary wave 4
2)Next day price should cross the high of the reversal candle during the trading hours and should sustain above it through out the day(Take 30% position when it crosses the high),if it manages to close above the high of reversal candle then take rest of the 70% position.Additional confirmation will be of minor 2-4 trendline breach and price closing above minor wave 4 highs and 10 day SMA.
3)Keep a SL of reversal candle low on closing basis and size your trade accordingly in order to not to loose more than 1% of your trading capital
4)Target zone for primary wave 5 is 357-380,as it is primary degree that we are expecting to unfold price might take 2-3 months to hit the target zone.
This post is for some one who is interested in trading stocks or indexes through elliot wave theory.I have tried to show how to label waves of different degrees and have mentioned trade setup that one should look for and have also mentioned position sizing logic.
Hope anyone reading this post find the information useful.
NIFTY... CORRECTION AHEADNifty has been in the parallel channel for quite some time and has completed the 5th Elliot wave.
We are likely to see a zig-zag correction where wave A is completed.
Wave B is most probably the last bull run we'll see ahead of Diwali.
The support line of the parallel channel is likely to be broken and I'm expecting a sharp correction in nifty (wave C) to 17000 levels.
Trade carefully. Please share your opinion on this analysis.
How to count Neo wave Impulse Current wave counts
Primary-wave 2 (orange)
Intermediate-wave A (Blue)
Minot-wave B (Red)
Minute-wave C (Yellow)
Applied Neo wave Impulse Rules:
1)Counting started from faster retraced low
2)wave 2 should not retrace wave 1 by more then 61.8%
3)wave 2 should be equal or longer then wave 1 in terms of time
4)0-2 TL should be clean and price action of 1 should not touch 0-2 TL
5)wave 3 should not be shortest
6)wave 4 should not enter wave 2 zone
7)2-4 channel should not have more then 4 touch point,here on 5th instance channel was broken
8)wave 4 should be longer then wave 3 in terms of time
9)Atleast 1 Alternation between intermediate wave 2 and 4 should be there,here alternation is observed in terms of retracement,pattern complexity,time and price
10)Every new motive wave had 2 stage confirmation.
Analysis
Looks like Tata steel is certainly not in buying zone,as it has completed intermediate impulse cycle and it has broken minute 2-4 TL,minor 2-4 TL(not shown in the charts),minute 4 low's in lesser time then minute 5 took to form and 21 day simple moving average.
A decisive close below 1400 can trigger fresh selling till 1240-1250 where previous price action zone comes along with 23.6% retracement of entire intermediate cycle from 365-1535.Hence short selling can be done if price goes below 1410 with a stop loss of 1460 on the upside and target of 1250 and 1140.
Continuing to this logic meanwhile during this fall if price's comes to 1250 level then it will be breaking intermediate 2-4 TL in lesser time then intermediate 5 took to form hence it can be assumed that intermediate top has been formed and going ahead price can even touch 1140 minor 4 lows and 709 intermediate 4 lows(I know it sounds ridiculous at this point) but i am mentioning this becoz it seems like we have completed intermediate impulse cycle.
As of now metals stocks are not participating in the on going rally so keep your exposure limited as in case of any major selling portfolio returns would be severely impacted if metals occupies major chunk of your portfolio.One can even start hedging by selling in the money call or of tata steel keeping mentioned spot price as stop-loss.Further Indicator's and Candle stick patterns can be used for efficient entry and exits.
PS: Interesting observation skip if you are already boared
1)As per the rules 5th(minute) extention of 5th(Minor) extention of 5th(Intermediate) wave cannot take corrective form unless 1st of highest degree 5th is sub-divided in 3.This is seen in this case.It was confusing me at first that Minor 5th is making terminal impulse by looking at the overall shape i got by connecting TL's but as Minor 1st of Intermediate 5 is not sub-divided in 3 this possiblity can be ruled out,also here Minute 4 has not entered Minute 2 pricezone which confirms termination of Minute,Minor and Intermediate 5th wave @ the shown place as per my view.
2)Both variation of Neo wave pattern Diametric pattern is seen,
Diamond Diametric-Intermediate wave 4
Bow-Tie Diametric-Minor wave 4
3)As mentioned by many Author's of wave theory and as noted historically wave 5 in commodities are longest.Here wave 5 is longest in terms of both price and time .
I have tried showing everything that i have charted hope-fully anyone reading this finds this post logical just like me
GNA AXELS : Wave counts + Time cycleIn this post i have tried analyzing chart by combining both price/volumes and time factor simultaneously. For deciding trend and predicting price i have used Elliot wave theory and for timing and entry/exit i have used cycle theory.
Elliot wave theory Impulse wave rule:
1)Wave 2 can't retrace wave 1 entirely
2)Wave 3 can't be shortest of wave 1,3 and 5
3)Wave 4 can't enter wave 1 price action zone.
Time rules of Neo wave (Extention of Elliot wave)
1)Wave 2 takes equal or more time then wave 1 took to form
2)Wave 4 takes equal or more time then wave 3 took to form
Wave labeling is done by following this rules.
Wave Count
Primary : Wave 4(Green)
Intermediate : Wave A(White)
Minor : Wave C(Orange) not shown.
Analysis:
As far as wave count's are concerned, since covid low's we are seeing impulsive rise in which we have completed wave 3 on Primary degree(green) and currently we are in Primary wave 4,Intermediate wave A, and going ahead prices will continue to correct or stay side-ways until Primary wave 4 is done,as wave 3 was extremely extended possibility of Primary wave 4 being an running flat is low meaning any forth coming bounce will not give us new high.
Time wise :As per Neo wave rule
1) Primary wave 4 can continue till December 2022 hence entering at current levels is not advisable.
Price wise :Support areas for Primary wave 4 to end.
1)We have 50 % retracement of Primary wave 3 coming at 641 along with minor wave 4 low's at 655 along with 200 ema average @ 620 which would keep increasing,there by making price action support zone of 640-660.
2)61.8% retracement of Primary wave 3 @ 530 and previous All Time High coming at 555 level(Confluence for price support) along with running intermediate trendline(white) making price action support Zone of 530-555.
3)Theoratically Primary wave 4 end's near Intermediate wave 4 of extended Primary wave 3 which is coming at 360 levels,we also have 80% retracement of Primary wave 3 coming at 360 level(Confluence for price support).
JM Hurst Cycle theory:
It states that stock prices follows definite cycle and achieve significant lows or trough's at the end(beginning) of each cycle.During any cycle price makes meaning low's around every cycle period time zone.Post a cycle low zone, prices reverses or trend changes,and if the low's made during cycle period time zone get's broken in the next cycle then during that entire cycle prices tend to correct.After his years of observation JM Hurst has found Nominal Cycle model which describes standard cycle's found in the markets he researched.One of the cycle he mentioned in Nominal model is of 20 weeks(which is being followed over here).There are many principles of cycle theory which i am not describing over here as it would complicate things.
Time Cycle: 22 week
Since beginning GNA AXLES seems to be following 22 weeks cycle meaning after every 22 weeks meaning full low is formed,post which we have seen prices going up and it this low is broken in the next cycle then during that entire cycle prices has corrected.Over here i have somewhere i have taken 23 weeks and somewhere 24 weeks just to capture exact low's however it can be seen that most of the time prices has formed low on 22nd week indicating stock is following 22 week cycle.As of now we are nearing cycle low time zone(week ending on 6th December)meaning after first or second week of December we can see minor bounce in the prices as per time cycle.
Combining Volumes:
Volumes were rising during this entire rise from covid low's during every impuslive wave high formation ie from Intermediate 1 of Primary 3 till Minor 3 of Intermediate 5 of Primary 3,and we can clearly see volume divergence on minor 5 high as it was achieved on an significantly low volume compare to minor 3 high.
Conclusion:
Price and time are not in favour of bulls hence investor or trader should keep stop-loss on there existing long positions depending upon there risk appetite and fresh long's should be avoided until Primary wave 4 is done.Any bounce from current price should be used to exit long positions.
Disclaimer:The analysis done in this post is just for education purpose and to introduce concept of time cycle,no position should be build or exited solely on it's basis.
Axis Bank Wave countElliot Rules and guideline
1)Wave 2 should not retrace entire wave 1(Here on cycle degree it retraced wave 1 by 61.8% which is ideal as per guideline)
2)Any one wave entend's other 2 by 161.8%,other 2 being equal in length(As per guidelineTypically wave 3 extend's and 1 & 5 tends towards equality).Here also Wave 3 extend's wave 1 by 161.8% and wave 1 and 5 tends towards equality
3)We see two different forms of correction in wave 2 and wave 4 one being regular flat in case of wave 2 and other being triangle in case of wave
4 (Triangles are typically formed in wave 4 which is seen over here) which is signifying asymmetry between both the waves.
Current count as per above logic and rules application.
Super cycle: Wave 2
Cycle: Wave C(might have begun)
Before covid prices has started showing weakness and already been correcting,and on the back of covid panic it completed cycle degree wave A of super cycle wave 2.Since then prices has been moving up in an corrective manner and when it approached previous ath levels it faced rasistance.So far we have seen 3 attempts made by price to penitrate ath which all failed to sustain on closing basis.We are also seeing a negative divergence on RSI indicating top formation.Along with this negative divergence price was moving in a rising channel which also got broken and previous pivot low were broken in lesser time then it took to form.
Going ahead we might see an impulsive down move unfolding to complete cycle degree wave c which would complete super cycle wave 2.Price wise super cycle wave 2 has already retraced super cycle wave 1 by 61.8% during wave A formation hence current fall should not break those low's(Covid lows).It is possible that wave C can stop any of the retracement levels be it 23.6%,38.2% or 50%(not shown over here) to complete super cycle wave 2 flat with truncated wave C correction.
Disclaimer:This are just my views do not trade on it's basis.I am post this analysis just for my future reference purpose.
Bank Nifty !! Elliot WavesThe analysis base on Elliott Wave Theory in weekly and daily time frame.
Elliott wave has three parts :
a) Impulse wave (Point 0-1, 2-3, 4-5), which net travels in the same direction (higher high) as the larger trend, always shows five waves in its pattern.
b) Corrective wave (Point 1-2, 3-4), on the other hand, net travels in the opposite direction (higher low) of the main trend.
c) Followed by three waves in a correction (A,B,C) - Lower High and Lower Low.
The Elliot waves combined with fib retrenchment give a broader idea to identify trend and reversal.
Disclaimer : Consult financial advisor before trading.
Thanks
How to Trade on GAPS and real-time identification of Gaps.Price gaps can be classified into four types: common, breakaway, acceleration, and exhaustion , During moments of consolidation, common gaps appear and mean virtually little.
The other forms of pricing differences are extremely significant.
Breakaway gaps: Early in a trend, breakaway gaps appear. Acceleration gaps are simple to spot and provide a wealth of information.
Finally, exhaustion gaps appear late in a trend and signify the start of a long correction or a new opposing trend.
What is an island reversal , exactly?
It's a price action island, as the name suggests.
The exhaustion and breakaway that constitute an island are exhaustion and breakaway.
A bearish island reversal would be defined as an exhaustion gap up followed by a breakaway gap down.
The Green Zone is entry zone and Red is for risk zone of long entry.
Bow-Tie diametric correctionPattern details:
1)It's a 7 leg corrective pattern
2)Here in first 3 leg's price's contracts after which wave d is formed (sort of wave x of wxy) which is followed by 3 expanding leg's,meaning contracting triangle connected by expanding triangle
3)Wave G tends towards equality wave A,wave F towards wave B,wave C towards wave E,however wave G can only be 38.2-50% of wave A on many occassion.
A decisive close above 54.30 would indicate end of wave f .wave g tgt is coming around 78 which is about 40% move.Long entry setup build's on close above 54.30 which would be second confirmation of clearing previous peak.As of now in today's trading session TL has already been breached indicating sign of strength.Also each down swing has taken identical time after which it has reversed,meaning current down swing is nearing end.On the down side lowest low can be kept as protective stop once entry criteria is meet.
Disclaimer:Analysis shown here is only for educational purpose trade should not be taken on the basis of this post.
Similar expressions of Elliott Wave structure on NIFTY.Elliott Wave Methodical Structure
This is a motive cycle of the Elliott Wave in which you can observe waves 1,3 and 5 are in direction of a trend. Wave 2 and 4 are against the direction which is called a "Corrective Wave".
Five-wave structures, numbered (1)-(5).
In the direction of the main trend of one larger degree.
Wave 2 cannot retrace at the starting point of wave 1
Wave 3 can never be the shortest.
Wave 4 never enters the price territory of wave 1.
Waves 1, 3, and 5 are motive waves.
Wave 3 is always an impulse wave.
I've also tagged some common words such as " steep jump ", " sideway/consolidation ", " pull back " etc. So, a reader can understand it easily. The design of the chart is very easy to understand therefore, I have posted the below charts to understand the easy structure of the Elliott Wave.
Now just check out NIFTY 50, Elliott Wave Structure, and Real Price in the below chart.
Elliott Wave with Actual Price
Yes, you got it now. Did you notice my entry-level at wave 2 on Aug 25, 2021? I have also published this chart on tradingivew.com. Check out the below chart.
----------------------REALIST-----------------------
Aug 25, 2021, published : (Entered with my position at the end of Wave 2)
Just, click on the "PLAY" button . I hope you understand now about Wave Counting.
Last updated on Sep 16, 2021 (Started 4rth corrective wave)
If you've still query about Elliott Wave, please comment.
bajaj finance complex correction wave countlooks like double correction to me
Primary degree: Red
Intermediate degree: Black
Minor degree: Blue.
Current Count:
Primary: wave Y
Intermediate: wave C
Minot: wave wave 3
complex correction's are identified by price movement confined in channel.Here we can see this phenomenon happening.wave Y has taken a form of an zigzag corrective pattern of which wave A and B is done and wave C is under progress.As the internal structure of zigzag is 5-3-5 we are right now in wave C sub-wave 3.Here wave C as per my understanding has taken a form of terminal impulse meaning wave 4 decline will be sharp and enter will enter wave 2 zone giving us minimum target for wave 4 till 6477(highest point of wave 2).
Currently wave 3 is in progress and before 2 day's we had spinning top kind of candle formation which was followed by a close below it's low in yesterday's trading session meaning we have already got one trend reversal signal hence if in coming 2 days price breaks important TL along with 7320 level then we can assume that wave 3 is done and wave 4 has commenced. Don't short until then.On the upside if the price crosses 8000 in tomorrow's trading session then we can assume wave 3 is still in progress and in that case we can expect price to move in upper channel rasistance zone.
Conclusion:
1)Fresh long only above 8000 with a stop of friday's low 7725.
2)For swing trader who is already long, trade's should be monitored carefully and stop-loss of 7320(previous swing low) should be maintained
3)Fresh short only advisable on faster retracement below 7320 in coming 2 days.
Trading Neo wave Bow-Tie diametric patternThis is an extention of WXY elliot wave pattern.This pattern has seven leg's just like WXY double corrective pattern.Here we see contraction in first 3 leg's high's and low's followed by smaller wave d bith in terms of price and time followed by expansion in last 3 legs.
Each leg is internally divided in 3 sub wave giving entire pattern internal structure of 3-3-3-3-3-3-3.
Guide-lines for target of each leg
wave a = wave g(generally 61.8%)
wave b = wave f(generally 80-100%)
wave c = wave e(generally 80-100%)
It seems like we are making Bow-Tie diametric pattern on bank nifty hourly chart of which leg a,b,c,d,e is done and leg f is going on and approaching it's price target(around 36650-660) from there we can expect leg g taking prices between 37730-38400(61.8%-100%)projection of leg a price move from leg f low's.
Trade set-up
If we get momentum divergence and bullish reversal candle followed by price taking out it's high along with Ichimoku cloud support on 15 min chart around 33650 levels(leg f tgt zone) then one can look to go long with a stop loss of leg f's low.
Trade should only be taken if trade setup criteria's are observed.Size your trade by following risk management rule of not lossing 1% of your capital on any trade
Expanded Flat or Irregular Correction IdentificationMost common found pattern. Its temporary pause to extended rally.
Key to identify this pattern is rejection after breaking wave A start.
Always look for very smaller margin rise above start of wave A.
C wave is sharp fall to reach 0.382 Fibonacci retracement of rally.
All other details explained in chart. Comment your doubts.
Identifying & eliminating type of correction through Neo wave L&T: Have tried labelling from covid low's.
*Logic behind labelling price as corrective structure:
From covid low's no swing has internal structure of an impulse, every swing is divided in 3 sub-waves meaning rise in L&T was corrective.Also no impulse rules were followed to make an impulse pattern ofhigher degree.
*Eliminating corrective pattern:
From covid low's we already have 5 waves(marked in green) having 3 internal sub-waves meaning we are in a middle of a triangle or complex wxyxz correction or diametric pattern,but looking at the price pattern it seems like we are having wxyxz triple correction as prices are neither converging nor expanding in order to make triangle or an diametric pattern.Hence i have labelled it as WXYXZ of which w,x,y,x is done and currently we are in wave z.
*Current structure & internal stage
Now this wave Z is sub-divided in lower degree 3 internal wave WXY(in orange) of which wave W and wave X is done.we are right now in wave Y of which wave A is done and wave B will be done shortly post which a rise in the form of wave C would complete entire WXYXZ 11 swing correction.
*Price Fore-cast on the basis of current labelling from current levels.
On the upside important level is 1740(123.6% extention of wave w in orange degree from wave x low's) and 1834(161.8% extention of wave w in orange degree from wave x low's) where entire pattern can end.
On the down side 1550-1580 zone can act as good support as we have a price action area in that zone.
*Conclusion
As per this labeling up side room is limited hence anyone holding this stock should keep stop-loss depending upon there risk appetite or by referring price levels mentioned above and new long's should be avoided from swing trading point of view
How to Eliminate elliot corrective patterns through Neo wave I can only come up with this following count,in order to come up with a logical count,i kept on taking more data in order to make some sense with my labeling.
Reason for considering current rise a part of Bow-Tie Diametric Pattern are as follows
Starting point was taken on the basis of faster retracement of prior swing high ,since then price has not shown any sign of an impulse as theres so much of overlapping seen in price along with corrective internal structure in each swing.
As far as corrective pattern is concerned only WXY and Diametric pattern has 7 leg,but if we connect trenline of tops with tops and bottom with bottom in white degree then the pattern takes shape of an bow-tie diametric where higher degree A terminates,movement following is also corrective and not impulsive hence collectively on higher degree(marking done in red)is also forming some kind of corrective pattern.
Till now we have already seen 4 swing and currently we are in 5th swing meaning we can count out Flat and Zigzag leaving us with triangle and diametric and complex wxy/xz.With regards to triangles either they are contracting or expanding in 5 leg's but over here we have seen both the phenomenon occuring by the time we are in 5th leg meaning we can even eliminate triangle pattern leaving us with only 2 pattern either a Diametric or an WXY/XZ complex correction.
From this we can conclude that on going rise will have 7 corrective leg's of which 4 are done and currently 5th is going on,as we have already seen contraction and expansion my primary assumption is of Bow-Tie Diametric even on Red degree and have used rule of equality for finding termination point of 5th,6th and 7th leg.
PS:Correct me if i have missed anything because by now i am already brain dead after analyzing this chart
WaveTalks-Nifty-The Evening Star / Wedge CollaborationThis short video explains how the evening star turns into a wedge pattern. If correct, downside 16590 was critical support, holding above Nifty could bounce back again to 16680-16700. On the upside, Holding below 16712 highs, It can attempt to fall back again to 16615-16625 & assuming that if Index falls below 16590-critical support, it can fall to 16500 / 16440 / 16400 levels
When you splash around the water, you get to hear a peculiar sound which you heard over the video at the start.
I have compared that sound of up & down in Nifty Index to water pool splash. This scenario in technical analysis is called a wedge pattern
What Is a Wedge?
A wedge is a price pattern marked by converging trend lines on a price chart. The two trend lines are drawn to connect the respective highs and lows of a price series throughout chosen periods. The lines show that the highs and the lows are either rising or falling giving the appearance of a wedge as the lines approach a convergence. Wedge-shaped trend lines are considered useful indicators of a potential reversal in price action.
Elliott Wave Analysis
These wedges are further classified as Type 1 / Type 2 diagonal (wedge). Depending on the position of the structure unfolding. They are called
(Type 1)Leading Diagonal – Start the price move
(Type 2)Ending Diagonal - End the price move
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Last Video Idea - Nifty Bearish Bat Harmonic Pattern
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3-Tricks : Where to start Elliott Wave counting on the chart? I get a lot of questions about Elliott Wave but a particular question often received from the followers:
Where to start wave counting on the chart?
How do I begin/start wave counting on the chart?
How do you do Wave Counting?
I’m going to introduce working 3-tricks which are used by me while establishing Elliott Wave Counting on a chart. These are my steps/processes or tricks that can help you to start counting waves.
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T rick 1 : Begin with an Extreme High and Low
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Key thing: you can actually begin the wave counting over the Extreme Low or Extreme High . It doesn’t matter if you start from extreme low or high. I am going to start Impulsive Wave Counting from Extreme Low in the middle of 2001.
The Wave Counting is quite simple on this chart with Wave 1,2 and nice acceleration in wave 3 that moves more confidently, wave 4 pullback and five-wave advance impulsive again. Now corrective phase, flat A, B, and C correction. This is a very easy and clear chart to identify wave counting.
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T rick 2 : Recognize the Pattern
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Just simply ask yourself “Do I recognize the Pattern?”
The answer is NO, then Okay
Next, ask yourself, Do I see a motive or corrective wave?
Elliott Wave classification in two phases, Motive, and Corrective phases. If it’s a motive-phase (wave 1,2,3,4 and 5) then, you have two patterns to work with:
1. Diagonal and,
2. Impulsive waves.
Suppose to, its Corrective-Phase (A,B, and C) then, you have 3 patterns,
3. Flat,
4. Zigzag and,
5. Triangle.
This is a counter-trend move(Corrective Phase) having Zigzag Pattern A, B, and C.
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T rick 3 : Start in the middle and move forward
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I don’t know what is going on but, in Aug 2013, the price moved 201 points from 69 to 271 which is a very strong upward move in a short period of time . This is a clean and clear sign of the 3rd wave .
If this move is Impulsive wave 3 then prior swing low can be labeled as wave (2) and prior swing high can be labeled as wave (1). Basically, it is Wave (1), (2), 1,2,3,4, and 5, (3), (4), and (5) motive phases.
More often, we may see gaps and price surges in a short period of time in Wave 3.
DON'T WORRY IF YOU ARE NEW IN WAVE ANALYSIS OR ELLIOTT WAVE. I CAN HELP YOU.
