Oct 182011
 

I have been receiving a steady stream of requests for an update on India’s main Stock Index. So I am presenting several charts that should guide readers in the near term. Please share with your friends and invite them to the club!

Elliott Wave Analysis of India’s NSEI suggests that there is room for one final leg down to around 4530 levels. Should we see that move, be prepared to buy near there because there is a reasonably good chance for a good sized recovery from there.

As always, the comments are brief, because the pictures speak more eloquently! Enjoy.

  48 Responses to “Elliott Wave Analysis of India’s NSEI”

  1. hello sir,
    bhavesh here, almost 1.5 months before i suggested you about the importance and a probable smart recovery from there, i am pleased seeing your charts today.

  2. CHANNEL PATTERN SUGGESTS 4500 LEVELS TOWARDS END OF THIS MONTH .
    GARTLEY PATTERN SUGGESTS 4300 LEVELS .

  3. Good to know Nifty will reach 4520 levels in coming time. Till then i will not buy any stock. once it reaches there i will start buying.
    Thanks a lot for your view.

    • Amar, Thanks for your comments. You need to bear in mind that technical analysis is only a guide to the markets, and nothing is certain until the event actually happens. However, it is a useful roadmap to have. You will have to evaluate the market conditions as and when certain levels are reached, or should something new trigger a new pattern.

  4. Thanks a lot. Sir, I hope market may correct upto 5200. Time will say but within how much time it will, I can’t say. Please share expected timeframe.

  5. Dear Ramki,
    I have one problem with the first chart. The same count will not fit on the sensex at the March 09 bottom as it would violate the cardinal rule of EW. However, if I took the March 09 low as a truncation, the counts are in sync for Nifty and Sensex. Nifty and Sensex are not like Dow and Nasdaq which measure different things. So I guess the count needs to work for both, am I right? The truncation also works well, in alternating the preceding 4th wave(Oct 08 lows to Feb 09 highs) with the 2nd wave (July to Aug 08). Since you have said in your book, never to loose sight of the picture at one degree higher, I ask this question. Keen to hear your views.
    Best regards,
    BJ

    • BJ, I dont see a violation of any EW rule in the Sensex if you apply the same patterns as NSEI. The only difference between the two charts is the top of Sensex fell marginally short of the 61.8% projection of the move from 0 to 3.

      • Dear Ramki,
        In the 1st chart you have taken the Nov 08 high as Red 1 and Nov 08 low as red 2. Jan 09 high as green (1) and March 09 low as green (2). In the case of Sensex the March 09 low of 8047 was well below the low of Nov 08 low of 8316 but above the Oct 08 low. So the subdivision (2) would be violating the cardinal rule, wouldnt it?
        Best regards,
        BJ

  6. Dear Ramki,
    Trust that u r doing well
    I do appriciate your views on nifty, i am keeping an eye on your tweets for last two months, Keen to get some knowladge from your books pls advice how to start.

    Kind Regards
    Jaspal Singh

  7. Thank you very much for your valuable guidence.

  8. Dear sir,
    I know this is very valuable analysis. can u upload your analysis as u study it ?
    that is I want to say that this analysis is not reached to us quickly so that can u do need full for this

    Thanks you sir
    Dipak Chaudhari

  9. Dear Ramki,

    We have crossed 5196 (reflex point) convincingly. Is thisvthe end of correction in nifty?

  10. Dear Ramki,
    First, Happy Diwali to you and your family. Thank you for showing us the light this year.

    If you could answer my above question – Why or why not the March 09 low on Nifty be the orthodox low of the previous bear market, it would probably be most useful lesson for us, atleast to me. If we treat March 09 low as orthodox low, it does away with 2 waves and the rise from March 09 would be a 3 and NOT a 5.

    Best regards,
    BJ

    • BJ, Most of the time, a visual examination of the chart is enough to tell you whether your wave count is correct. The March 2009 low in NIFTY was at 2555. The Nov 2008 low was 2503 and the Oct 2008 low was 2252. So your orthodox low is two steps higher than the lowest low. Besides, the decline into March 2009 looks like a 3 wave downmove from the high of 2930 seen in Jan 2009. For these reasons, I would not insist on the March 2009 low being the end of the prior bear phase.

      I have a request to all my readers. Many of you would have doubts about specific stocks, and would like to verify whether your understanding is correct. Unfortunately, I have only a few hours of spare time every evening, and am unable to respond to all your requests for help. However, I am thinking of starting a forum where other readers could post their views on your questions, and it will be a healthy exchange of ideas. After all, no one can claim to be correct until after a move is over! As I don;t have a good knowledge on how to incorporate a forum in my blog this could take a few weeks (I am going on a short vacation soon). PLease bear with me until I fix this for you, and then you can post your questions there.

  11. Hi Ramki:

    Thanks for giving such a good simple book “Five Waves to Financial Freedom”. Thoroughly enjoyed reading it and . Happy Diwali :)

  12. happy deepawali , sir. may the festival of lights bring to you joy, prosperity, peace of mind & love .

  13. Hi Sir,

    Happy Diwali!!!.
    We have crossed the reflex point of 5196 as discussed in the earlier post.
    Considering the Europe movement today, we can see additional increase in nifty which can take to higher level. Please guide us to understand the wave counts.

    Meena.

  14. Dear Ramki,

    Can you please provide us with an updated analysis of NSE.

    Regards
    Rahul

  15. hi sir, wishing you a very very power packed new year ahead which brings abundance of wealth & health.
    i wish you take a glance is this chart which i posted on my blog in end of august 2011.
    http://bhoom2tika.blogspot.com/2011/08/watch-4538.html

  16. IF I AM NOT WRONG…………… FROM WHOLE DOWN WARD IS TREATED AS 1-2-3 DOWN WAVE….UP TO 4731 AND FROM THERE 1-2-3 UPWARD TO 6570.THEN STEEEP DOWN UP TO TARGET OF 3900- ???? PL COMMENT

    • Hi Mani, just about anything is possible. How you are going to trade your view is what is important. To take low risk exposures you need to apply the techniques I have tried to propagate in this blog and in the book.

  17. Respected Sir,
    Happy Diwali & Prosperous New Year to you & your family,
    as we have shown in older post of nifty 4th wave of 2nd zigzag is complete @ 5160 but today (28/10/2011) nifty has gone up to higher levels so we consider Wave A is completed & Wave B has started & it is completed @ 5720 (whole Wave of A that is 61.8 %) so pl. guide us ?

  18. Dear Ramki;
    Todays gapup has ruffled the EW counts for Nifty.What’s your take now?5180 was the c 4 top,but today we find that 5180 was not the c4 top.If on Monday,we kiss 5445,would that be c4 top and then a 5 wave move downwards will take the Nifty to 4520? Please comment !

  19. We should not ignore the double bottom reversal (W formation) for a target around 5580 – 5620

  20. Friends,
    My view of the market is that we are now in wave-X after a A-B-C (6338-5196-5923-4720) correction from 6338 to 4720. The 4720 level is around 38.2% correction from the previous rise upto 6338. The present downfall from 6338 is a flat and we are in wave[C]. Probably, the terminus of wave-X will be around 5470 from the following reasons.
    1. The rise from 4720 seems to be flat 4720-5169-4741-… and we are in wave-C of the flat. The 161.8% projection of wave-A points out around 5450 level.
    2. The wave-C of the flat is making an impulse from hourly charts where wave-1 (4728-5160) is extended and wave-2 (5160-5040)has made one triangle and we are in currently wave-3. A rough calculation implies that we may end some where around 5500. An impulse in wave-c suggest the end of the next-higher degree wave.
    3. The most crucial is the 0-b trendline from 6338 points out around 5400-5500 level in the next two weeks.
    4. Check the volume which suggests no sign of bull move, in fact the volume in the wave-c of the flat from 4728 is lower than wave-a and b.
    But whether wave-IV or wave-X, we are in rising mode.
    Further, predications of 4500 level as wave-5 or wave-a (2nd correction) do not matter. Most likely, we will encounter 2nd correction. In fact, the perfect channel moves suspect the fall may be a dual or triple correction.
    Comments are appreciated.

  21. Respected sir,

    Sir recently i have purchased your E-Book studding it very good content in it thanks.
    Sir i have my own observation in nifty (Nse india) the fall from 6357(11-01-2008) to 2539(6-03-2009) A-B-C formation. and rise from 2539(6-03-2009) 17-10-2009 is 3 wave wave for A flat for B Wave and 4786(28-05-2010) to 6336(12-11-2010) for wave C.
    in Brief For Flat Correction
    Wave A 6357.10 -2539
    Wave B 2539-6336
    Wave C continue for Five wave..
    Sir Please reply for my alternative counting all observation are nifty Weakly chart.

    Thanking You,
    Nirav

  22. Sir, I’m really starting to get a feeling that we’re just amidst c1 wave not c3 !The state of goal economy actually is enforcing this feeling that the C1 & C2 wave could not complete so quickly – I think its about now we should see some sort of a pullback from here and retrace back to 5000 levels (c2) If you draw a projection line from 5740 XB (on July 8th 2011) to 4720 (on 26th Aug and back to 5399 (on 28th oct) we see yesterday Nifty stopped exactly @ the 61.8 % levels (4778)
    76.4% levels comes in @ 4625 -35.
    100 % @ 4390
    138.2% @ 4000
    161.8% @ 3750

    The X wave started in April and XB which i assume now is @ 5400 took 7 months to complete and c3 wave has already started to pack up seems strange. Could you verify this for us please ?

    • Gaurav, May I suggest that you post your counts on the Forum and let others contribute? The reason is I am awfully busy, and not always able to update wavetimes. Hope you undertand

      • Sir,
        I have already posted the same mentioned above in the forum, but an experts view is an experts view. I understand you’re busy on time if you ever do have time to answer this please do. I ll keep checking. No rush.
        Thanks again. :)
        Gaurav

  23. Ramki, I did’nt get the logic behind buying near 4535 levels ? Can you please post the count for this — Thanks Pankaj

  24. Dear Ramki,
    Congratulations…we reached today to 4530..should I start buying?…I am a long term investor..

    Thanks in advance.

    • Hello Dr Jignesh, The target of 4535 was projected under a double zigzag scenario, and we are actually doing a tripple zigzag. So perhaps there is another 100 points left in the Nifty. Have to look at the chart, but I am travelling. Yet, I want you to know that yesterday I put in my first lot into a Nifty Index Fund and will add every 100 points down, because, for the long term investor, that is a good strategy. It is only the trader who operates with a close stop that catching the very bottom is so crucial.

      • Ramki sir,
        If we think of the correction as triple zig zag and 5400 is the A for the third zig zag then 100% of A-B would imply wave c ends around 5340 levels. Wanted to understand your views on this this target. Can wave C actually extend 1.68A-B ?

      • Thank you very much for prompt reply.
        As a long term investor, I am ready to take 100-200 point risk for my investments.

  25. Absolutely fantastic analysis and an excellent guide both for the short term traders and
    long term investors. I SINCERELY THANK RAMKY SIR for all the efforts he takes.
    Wish him a happy vacation and a very Happy and Prosperous 2012
    Thanks and warm regards

  26. Hello Ramki,

    I have a question on the NSEI analysis that you have put.

    1) Sub Wave 2 of Wave 3 almost retraces very close to origin of Sub wave 1 of Wave 3. But I had read somewhere that Wave 2 should never retrace more than 80% of Wave 1. Is this true? Or sometimes exceptions are allowed? (Ref. NSEI-18Oct2011a Image)

    2) In the formation of ‘X’ wave, when would somebody know that an ‘X’ wave is fully formed. For e.g., in the image (NSEI-18Oct2011a Image), I think we could have marked an ‘X’ wave only after 2nd ‘C’ wave made low below the 1st ‘C’ wave. Please let me know if my understanding is right?

    /Arian@SFO

    • Hi Arin, re question 1, not true. Elliott only sys I cannot go below start of wave 1. Re question 2, no one cn tell in advance what shape an X wave will take

  27. Dear Sir,
    If we Have Completed The Downside,
    1. Wouldn’t it be wise To wait for the Higher Top & Higher Bottom Formation
    2. What is The Max Upside or the Target we are playing for

    • Hi Vinay, There are many approaches to trading the market. If you learn the techniques explained in my book, you can figure out potential upside and downside targets. I will be doing an update on NSEI in due course, but it will be to your advantage to learn the techniques instead of relying on others.

 Leave a Reply

(required)

(required)