BHEL - Elliott Wave Analysis Application : Expanding Wedge Disclaimer:
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Elliott Wave Analysis Insight
BHEL's stock movement is currently showcasing an expanding wedge or ending diagonal pattern, often seen in the final phases of a trend, such as the fifth wave or wave -C in Elliott Wave Analysis. This pattern indicates we're possibly at a critical juncture.
Today's High and Implications
Today, BHEL hit a peak at 234.45, a significant level under Elliott Wave Analysis. This point is crucial because it tests the cardinal rule that Wave 3 must not be the shortest, and Wave 3 should be equal to or greater than either Wave 1 or Wave 5. In current BHEL's case, Wave 1 surpasses Wave 3, creating a unique situation. The stock's movement above 234.45 or 235 could mean Wave 5 will also exceed Wave 3, violating the cardinal rule of Elliott wave analysis, which is not allowed.
Technical Indicators and Outlook
The RSI shows a negative divergence, indicating the recent rise to 234/235 might not have strong momentum behind it. This divergence suggests caution.
What's Next for BHEL?
If BHEL remains below the 235 resistance, we might see a retracement to 200, a key support level. A fall below 200 could lead to a further drop to 165.80, which would be critical to watch.
Conclusion
BHEL's stock is at a pivotal point, with Elliott Wave Analysis providing a unique lens to anticipate future movements. While the resistance at 235 is vital, the underlying momentum indicators suggest a potential pullback. Investors and analysts should keep a close eye on these levels for future direction.
WaveTalks... Market Whispers... Can you hear them?
