Jun 182009
 
Tata Steel breaks support

Tata Steel breaks support

A technical trader has to watch a few things carefully, especially if we are in the fourth wave position. First, see if the 2nd wave was a simple correction. If you can confirm to yourself that the second wave was a simple one, then the fourth wave will very likely be a complex correction.  I would usually avoid trading a fourth wave correction because at this position, a stock can change course quite unexpectedly. What looks like a clear formation today (a triangle in Tata Steel 2 days back!) can become a different pattern another day.

In the case of Tata Steel, I have indicated that the 363-364 level will attract. However, there is no guarantee that we will get there the first try, or if we did, that it will hold. Don’t be surprised if we go lower to 353 and then climb again. Alternately, if the broad market recovers, we could find support around 373 and go back up. Later on, we could come down again to reach 364. Thus, there are too many variables at play in a complex 4th wave for you to trade this stock. One this is certain. If we have counted the waves correctly, then a move back as a fifth wave should be expected, and that fifth wave will at least be equal to the first wave, or Rs 108. Assuming one buys this stock in two lots at 365 and 323 (close to the 50% retracement level), the average rate will be 344. If the stock actually reaches 322 before climbing 108, the objective will be 430. That is still a 25% gain. Thus, if you insist on trading the upcoming fifth wave,  plan your trades based on these inputs.

  8 Responses to “Tata Steel breaks support”

  1. Can you share your view regarding Sensex? Is it in the A,B,C correction wave or the bear market impulse wave of 1,2,3,4 and 5?

  2. Dear Mr. Ramki,

    I really enjoyed your informative website in elliot wave analysis. waht is so special in your website is that: it is the most reach website in terms of examples.
    I have some experince in elliot wave and I have several questions to you if possible:
    Did you use any technical indecators to assist you in identifying the wave count?
    In your wave countining, are you starting with monthy/weekly chart then going to the lower chart daily/intrday is most be consistant?
    did you use any automatic wave count software such refind elliot?
    Do you expect Eur/USD minor correction flat or D3?
    Wath is your expectation of Saudi index currently are we in fourth wave and will get soon to fifth wave (down side)?

    Sorry to make it that long, but I am hungryfor elliot analysis.

    Thank you and best Regards,

    • Hello HG,
      Q:Did you use any technical indecators to assist you in identifying the wave count?
      A: Yes and no. One important clue is volume, where available. The technical indicators that I use are all the standard ones. But no one indicator can replace your own ‘feel’ for the market.
      Q:In your wave countining, are you starting with monthy/weekly chart then going to the lower chart daily/intrday is most be consistant?
      A: It is ideal to start from a larger time frame. Sometimes, when one is looking to trade just the very short term, it is ot necessary to go too far back.

  3. pls help me i m new for equity mkt.

  4. Priti, If you wish to “invest” in the equity market, I suggest that you read Jason Zweig (my favorite author). If you wish to trade, then there are lots of good resources in the web, and wavetimes is just one of them. Good luck.

  5. Ramki Sir,

    I look forward to your update on Tata Steel. It went up to Rs.670 or so recently and has since corrected to Rs.575 odd levels. Is it worth looking at? What are possible targets.

    Regards
    R Sathyamurthy

  6. Sure Sir.

    Thanks!

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