Sep 052015
 

Elliott Wave analysis works in all freely traded markets. The last time I offered you my Elliott Wave analysis of Egypt’s equity index, EGX30, it was back in August 2012. You can access that blog post by looking at the menu at the top of WaveTimes, under ‘Equities, Index, Africa, Egypt’.
You will see how we identified that the Egyptian index was likely to make significant gains. At that time, the index was trading at 5049. A lot of water has since flown down the Nile, but the Egyptian stock market almost doubled. I am sure a lot of investors made handsome profits in individual stocks.
However, the inevitable Elliott Wave correction set in once the five wave cycle was completed. If you had read my book Elliott Wave book “Five Waves to Financial Freedom’ you will be able to spot how so many of the observations there has played out in the Egyptian Stock Index or EGX30 index.

In the following Elliott Wave charts, I demonstrate some of the salient points. Remember that this blog exists as a resource for the student of Elliott Waves. Whether you are a professional trader, a casual investor or a serious student of Elliott Waves, the examples available here will fascinate you and help you better understand the nature of financial markets and how you could anticipate the market turns. So without any further ado, present you the charts of the Egyptian Stock market index and how Elliott Wave analysis was so powerful in its play.

Egypt's stock index traced an extended third wave

Egypt’s stock index traced an extended third wave


Observe how sub wave 5 inside the 3rd wave was equal to sub wave 1

Observe how sub wave 5 inside the 3rd wave was equal to sub wave 1

wave 4 was shallow and came between 23.6% and 38.2% of wave 3

wave 4 was shallow and came between 23.6% and 38.2% of wave 3

wave 5 was equal to wave 1

wave 5 was equal to wave 1

Once the 5 wave move ended, a huge correction started

Once the 5 wave move ended, a huge correction started

Now that you have seen how Elliott Waves work, go back to FWTFF and try and see if you could figure out the likely ending point of the on going correction. Good luck.

Aug 072012
 

Is it possible to do an Elliott Wave Analysis of Egypt’s EGX30 index? Yes, of course. Take a look at the attached chart. You can see clearly that the second wave retraced wave 1 by 50%. That was followed by the third wave travelling just a shade over 161.8% of wave 1. We then got a 23.6% correction as wave 4, an early warning that wave 5 was likely to extend because the first wave and third wave were normal in size. Sure enough, the fifth wave travelled over 123.6% of the distance from points 0 to 3. Interestingly, the fifth wave finished with a diagonal triangle, a typical pattern that signals the end of a major move. Also, you can see the fifth wave is made up of 5 minor waves. The diagional itself has 5 tiny waves inside it. Everything fits perfectly into what Ralph Nelson Elliott told us to look for! Remember what I explained in my book “Five Waves to Financial Freedom”, that when we see an extended fifth wave finish, we should get ready for a speedy recovery back to wave 2 within the fifth wave. Look what happened with Egypt’s EGX30 index! Once the extended fifth wave was completed, we got a fairly quick move back to the second wave within the fifth wave. It always works like magic! Let us call that recovery wave 1.

Elliott Wave Analysis of Egypt's EGX30 index

Elliott Wave Analysis of Egypt’s EGX30 index

The subsequent correction should be made up of 3 waves, and this looks like its finished that too. That means we should get ready for a third wave move higher, unless the second wave itself was going to become a complex correction. Our clue will be with the speed of the rally. If we don’t get started soon on the upside, we will have to reckon with one more test downside, but as of now, the index looks positive. I think any swift move above the 5700 will encourage the bulls. Good luck.