Tuesday, September 17, 2013

Elliott wave: Nifty example of Applying Advanced Elliott wave concepts and GAP analysis

The following is a part of the research picked up from the daily research report “The Financial Waves short term update” by Waves Strategy Advisors 
Bottom Line: Nifty had a Gap up opening of almost 80 points but failed to sustain it near 5950 levels and closed negative.
Nifty had a Gap up opening of almost 80 points and prices rallied towards 5950 levels. This is above the level of where wave iii ended. Thereby wave v met the minimum upside criteria. Prices reversed after touching 5950 and closed the entire Gap up opening. This was the 3rd Gap up since the start of impulse pattern from 5400 and was filled indicating it to be an “Exhaustion Gap”.
We are showing Nifty 10 mins chart (in addition to daily and 60 mins chart and 3 different stocks shown in actual report) that clearly shows an impulse pattern. A few guidelines of impulse patternsuggest that
Guidelines / Rules from Advanced Elliott wave concepts and Neo wave:
-    Atleast one wave should be near 1.618 times the largest wave. In this case wave iii is almost equal to 1.618 * wave i.
-    Wave ii and iv should alternate in as many ways as possible. We can clearly see alternation in terms of time, pattern, complexity
-    Wave v on upside should move with lesser momentum compared to wave iii most of the times when wave iii is extended. We can see negative divergence between end of wave iii and wave v on hourly scale.
-   Wave v should tends towards equality with wave i in terms of price and/or time. We can see that wave i was just a Gap and so is wave v. In terms of price wave v did not make equality with i but managed around 50% of wave i. However fulfilling the time guideline.
-   The confirmation that wave v is over is obtained on break of ii – iv trendline which happened yesterday along with complete retracement of wave v in faster time. Both of these conditions are satisfied yesterday itself thereby confirming that wave v top is in place and prices have started the retracement of the up move from …………..
This correction on downside is going to provide more vital clues to the overall health of Indian market. The up move has taken almost 7 days and so correction should last atleast…………….before uptrend can resume. Failure to adhere to this guideline will indicate some other pattern is probably developing. Also the correction should not retrace more than 61.8% which is near …….. So we should see a range bound movement between ……………. atleast for ??? days before expecting any trending move.
We have only listed a few guidelines above and there is much more to it. The predictability increases during impulsive waves and reduces during complex corrections. But we are aware for how long this correction is going to last and what is the threshold level till the correction can go on. It gives us a very specific scientific prescription to look at the markets. Positional traders can now take  breather and intraday traders now knows which direction to bet.
Subscribe to daily research report for knowing not only the price range but also the number of days this correction can last. Also we have a 2 days training program scheduled in Mumbai on 12th13th October 2013 that will clearly explain each of the above concepts in addition to very important channeling techniques, price and time concepts picked up from Advanced Elliott wave –Neo wave not as a rule but as a guideline - A hybrid technique! That will assist you in forming your own trading strategy… For more information visit www.wavesstrategy.com


  1. Ashish sahab

    have one question on the alternation between ii and iv

    ii retraced just about or less than 23.6% of i

    iv too retraced just about 38.2% of iii and less than 23.6% of combined distance wave i - wave iii

    Both seem shallow......

    Also - Generally when the ii is shallow..........we should have a iii that packs a punch........in this case....it did almost 161.8% but not more than.

    Wud u still consider the move an impulse............?

    and how wud u consider the move from 5119.......will it be an impulse? or corrective?

    thanks you in advance Ashish sahab

    1. Yes, I would still consider it impulse since it has traveled 161.8%, I am considering move from 5119 to 5400 part of previous correction since it did not retrace prior downleg faster and only after 5400 onwards the move is impulsive..