HDFC Bank – A clear impulse Elliott wave pattern!

Elliott wave gives chart an identity and provides vital information on the maturity of the overall trend. 

It not only helps to understand the direction but the other basic technical tools like Moving averages and indicators like RSI makes a lot more sense when combined with Elliott wave structure. Many times even strong RSI divergences do not produce desired result. This is a typical characteristics produced during the formation of wave 5 on upside.

Now look at the chart below of HDFC Bank without Elliott wave counts:

HDFC Bank weekly chart:

Now see how much more information we get by simply adding a few numbers – Elliott wave counts on the chart:

HDFC Bank weekly chart:

Looking at the above chart, for an investor or a trader one can conclude that the trend that started from the lows of 150 in early 2009 is in matured stage of up move. Prices are already showing negative divergences on weekly scale which further confirms that the current ongoing leg is wave 5. Also this wave 5 is internally subdivided into smaller 5 waves and we are now in intermediate degree v of 5. This means one minor upside push is pending in this stock and once the lows of 20 weeks Exponential Moving average breaks we will get first negative confirmation i.e. below 780. For longer term trend reversal confirmation we should wait for 100 weeks Exponential average to break which is placed near 700. Once this happens Fibonacci retracementratios will kick in that will help us with projections.

However, since the uptrend can continue for few more weeks or months one needs to look at daily and short term charts for further clarity on overall timing the trade or investments!

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