TCS Buying Opportunity▎Analysis of TCS Stock using Elliott Wave Theory
Overview:
TCS (Tata Consultancy Services) has recently formed an Ending Diagonal pattern in the 75-minute timeframe, indicative of a terminal impulse wave. This pattern suggests that the stock may be nearing the end of its current trend, and a reversal could be imminent.
Elliott Wave Theory Context:
According to Elliott Wave Theory, an Ending Diagonal typically occurs in the final wave of a trend (Wave 5). This pattern is characterized by converging trendlines and can signify exhaustion in buying or selling pressure. Traders often look for a reversal after such formations, particularly when combined with Fibonacci retracement levels.
Fibonacci Retracement:
Following the completion of the Ending Diagonal, TCS has retraced approximately 61.8% of its previous upward move. The 61.8% Fibonacci retracement level is considered a significant area for potential support, where aggressive traders might start to accumulate positions in anticipation of a reversal.
For those who prefer a more conservative approach, waiting for the 81% retracement level could provide an additional margin of safety before entering a trade. This level often acts as a strong support zone and can offer better risk-reward ratios.
Entry Points:
• Aggressive Entry: Near the 61.8% Fibonacci retracement level.
• Conservative Entry: Around the 81% Fibonacci retracement level.
Stop Loss:
As indicated in the accompanying chart, it is crucial to place a stop loss just below the recent swing low or beneath the 81% retracement level. This helps to manage risk effectively should the market move against the anticipated direction.
▎Conclusion:
The current technical setup for TCS presents potential buying opportunities based on the Ending Diagonal formation and Fibonacci retracement levels. Traders should consider their risk tolerance and trading style when deciding on entry points and stop loss placements. As always, it is essential to conduct further analysis and confirm signals with additional indicators before making trading decisions.
Disclaimer: This analysis is for educational purposes only and should not be considered as financial advice. Always do your own research and consult with a financial advisor before making investment decisions.
