this is the chart i wanted to post for a while now. this is my long term elliot wave count for nifty. I maintain this count on this link which is for a group of EW followers globally. This count was verified by one of the best EW practitioners globally - Tony caldaro.
According to this count, India made a cycle wave 2 low in 2008 and rallied till nov-10 to complete primary wave 1 of cycle wave 3. since then, we complete major 1,2 and currently in major 3. in the short term, we may have completed intermediate wave1 at the recent high and currently in early stages of intermediate 3 of major 3 of primary 3 of cycle wave 3(nested 3s). if this count is correct we are in early stages of a bull market of epic proportions. this count gets more weight because of how under invested Indian public is in equities.
smallcaps and midcaps are lagging at the moment but should play catchup in 2013. I would post their count at some point. Please feel free to ask questions.
I apologise in advance if I broke any forum regulations by posting a link but this is not to market any othersite but just to post my technical analysis on nifty.
guys, just as a disclaimer, i am bullish on indian equities although the count is purely technical and doesn’t depend on sentiments or bias. every count is correct until proven otherwise. please don’t base any investment decisions purely on this analysis.this just helps people to create better entry and exit points.
If you look at daily close levels(which i look at as most important), nifty made the low in 2008 and a higher low in march 2009 suggesting that the primary low was in 2008. In the order of waves, every country goes through huge cultural, social and economic changes over time where one full such cycle is defined by grand super cycle(GSC), smaller waves within GSCs are cycle waves. so the order goes as grand super cycle(GSC), Cycle(C), Primary(P), Major(M), Intermediate (I), Minor(m). beyond this degree, the waves do not matter as much.
I don’t like to make projections but rather monitor the waves and adjust if needed. but I would expect nifty to make a new all time high some time in 2013 and nifty to get to 8300+ before this primary wave finishes. this would be on the conservative side because third waves are usually the longest(but this is not necessary).
I have been reading vivek patil’s analysis off and on in icicidirect.com.
what he mentions is that the current upmove is likely to terminate somewhere lower below earlier peak of 21108 in nov 10. After that he expects index to correct and break the Nov 11 lows of 15135. What he says is that index is moving in a diametric formation with various legs labelled A-B-C-D-E etc.
Currently he says we are in a wave up which he labels as D and this is to be followed by downwave E.
Another of his arguments is that most of tops till now have been made in the Dec - Feb periods in corresponding years.
What he says is to exercise caution while initiating long positions.
I dont know too much about these Elliot Waves and havent taken Patil’s views or any other elliot wave expert too seriously but read it ocassionally to know what he is upto next.
vivek patil doesn’t follow what is called classic elliot wave analysis but he follows neo wave analysis. neowave experts have missed the rally in spx over the last 2-3 years. they have been bearish for a while now and so has been vivek.
elliot wave experts also get very subjective at times like robert prechter who has been prophesizing the end of the world for the last 4 years. what i follow is OEW(objective elliot wave) theory created by tony caldaro which only looks at data and doesn’t use any positive or negative bias. this is not to praise tony as such but i have followed tony for years and he has been able to predict the 2008 bottom and the current bull market to the T. he was one of the only ones bullish when spx was falling apart in aug-sep 2011.
From the count I have, I see we are innew bull market that started in dec-11 and should continue atleast into early 2014. would ofcourse update the count if I see some evidence(again only objective) that suggests to the contrary. This count is the reason why I decided to jump onto indian stocks in nov-11 when I thought the correction was in last stages and have been fully invested since then.
Here is a chart by Deepak Shenoy (not technical though ) which helps keep perspective of overall indices movement. Specially important is the market levels relative to P/E lines.
As noted, the 12 P/E line forms the strong base where the markets found support last time in Oct-2008 and Mar-2009.
OEW is indeed very interesting and better than anything I have learned at school to help me in my trading career. It has helped me tremendously in my profession but it is a closed global group that tony maintains and we are not allowed to share the technical details on an open platform. There is a paid course that tony runs to teach this through emails. You can get in touch with him. The basics are the same as the classic Elliot wave theory for which you can find enormous amount of material on the internet. It only differs in the way in which it quantifies the waves. If you understand classic Elliot wave theory, you would be able to relate to the charts I have posted. Please do keep in mind that I subscribed to this course because of my profession and My purpose here is not to recommend this course to anyone here. I am just using my leanings to help fellow investors here. I would try to update charts for various stocks that I follow as well here.
Referring to the chart link provided in my first post on this thread, nifty seems to have finished minor 2 of intermediate 3. The minor 3 wave to the all time highs of 6300 should be underway now.
I guess There are some major flaws in your counts on Nf Daily chart
I think your major 2 ends at 4770, if so then how can minor impulse wave 1 has only 3 wave ?
minor 5 is truncated as per your counts so minute wave i starts from 5600 odd to roughly 5800. I dont know how wave ii is longer than i ?? as per your markings wave ii ends at 5540 .
OK so when i look at weekly chart this i is actually minor wave which lasted around 6 months. While wave ii only 1 week ??? Neowave usually tells corrections are more time consuming than an impulse wave. If that were to be true then this whole count is invalid.
1). I work with only daily close levels because intraday levels have too much noise.the level that you have recognised as end if major 2 is actually end of micro 2 of minor wave 1. The major 2 wave finished at the low before that. If you look at the daily close levels you would see that the major 2 low was lower than micro 2 of minor 1.
2). Intermediate 1 started in jun 12 so was a big wave of about 1000 points. Intermediate 2 is much smaller compared to that. It corrected only about 200 points.
3). On the weekly chart i is actually intermediate wave which is one degree higher than the minor waves.
4). Corrections may last longer or shorter than the impulse waves. They do not need to last longer than the impulse waves.I do not follow neo wave and do not know of its requirements. I follow oew which is objective adaptation of classic Elliot wave theory.
my targets are very high on nifty. i personally think we may see nifty double from here over the next 5 years and that would be a conservative target. immediate targets over the next year should be 20% rally from here so 7000-7200. i do think that india and china may continue to rally while the western markets muddle through their bear markets. there is a historical precedence for this when from 2000-2007 spx didn’t go anywhere(0% return) while nifty multiplied 5-6x. to present the possiblities on nifty:
primary 1 was 3777 points(2008-10)
conservatively, primary 3 could be 0.618x, 1x,1.386xof primary 1 which gives me targets of 6888-9789 on the nifty.
in the bull case, it could be2.618x-4.236x of primary 1 which wouldgive me targets of 14443-20554. theseseem too far off would nowand hence we should take it 1 year at a time.
for now, i am looking for the first target of 6888 this year.
icici guys have again come up with a report on sensex and nifty cautioning investors and given some historical precedents where they claim that the indices top out in the first three months of the year and same could apply here.
What they say is that index may post a new high or slightly lower high and then go into correction and give around 20% correction and it would be wise to buy closer to 16-17k instead of current levels.
I only expect a little hesitation around the highs. If index touches the highs and corrects 20% from there, that would complete a solid triple top and the index would target 2008 lows next. I would not buy even at 16-17k then.
Considering we are in Minor wave 4 now, according to OEWis it OK to assume that lows formed in minor 4 cannot be lower than the low formed in minor 2 (in this case 5825 odd) if the wave count is correct?
Also if this does go lower, does it mean the wave count so far has been wrong? and needs to be re counted?
) which helps keep perspective of overall indices movement. Specially important is the market levels relative to P/E lines.
