India Bombay Stock Exchange - Wave 5 in Progress

wavetrader · #1 3rd July 2006, 07:32 AM

The rally in the BSE makes the rally in the America’s from the late nineties look like child’s play. It’s amazing that the Western world has paid so very little attention to the rally that has been in progress.

Wave-1 took the BSE from 2904.44 to 6249.60. Wave-2 terminated at 4227.50 and then began a rally similar to the rush in the roaring 20s. The BSE didn’t take one look back as it screamed higher from 4227.50 up to the all-time high of 12,671.11.

In Wave patterns there is a concept of extension waves. An extension wave occurs when one of the 3 impulsive waves is 161.8% the length of the next longest wave. The rally in the BSE is a Wave-3 extension. This is the most impulsive move in a market. When looking at the BSE chart http://blogs.mysmp.com/waveman, you can clearly see that Wave-3 is the extension Wave. Wave-1 was a total of 3,344.56 points. When you look at the third wave rally, you can see it was almost 261.8% of Wave-1.

So, what does all of this mean? Since Wave-4 has completed, we are now looking for the Wave-5 top, which will begin a new secular bear market. Based on the rules of Elliott Wave, when the Wave-3 is extended, Wave-1 will more than likely be equal in length to Wave-5. So, to come up with a target for Wave-5, we simply take the price length of Wave-1 (3,344.56) and add it to the bottom of Wave-4 (8,799.01) for a Wave-5 target of 12,143.57.

Another possiblity for the length of Wave-5 is 5,411.49. An unlikely target, but possible length for Wave-5 is 161.8% of Wave-1. This would give us a Wave-5 Target of 14,210.50. While the rules of Elliott Wave state this target is unlikely, due to the extent of the rally thus far, it is probably the most realistic target.

Good Luck Trading

Agilent · #2 3rd July 2006, 02:42 PM

Well ... 50 views and not even one response.

Is it because you seem to have done a cut and paste job, Wave ?

No problem with that , as long as :
- you quote your source
- you add your own comments /analysis (e.g. in this case, the basics of Wave theory)

Hope my comments help in some way

AGILENT

gobatman2001 · #3 3rd July 2006, 03:12 PM

Quote:

Originally Posted by wavetrader

The rally in the BSE makes the rally in the America’s from the late nineties look like child’s play. It’s amazing that the Western world has paid so very little attention to the rally that has been in progress.

Wave-1 took the BSE from 2904.44 to 6249.60. Wave-2 terminated at 4227.50 and then began a rally similar to the rush in the roaring 20s. The BSE didn’t take one look back as it screamed higher from 4227.50 up to the all-time high of 12,671.11.

In Wave patterns there is a concept of extension waves. An extension wave occurs when one of the 3 impulsive waves is 161.8% the length of the next longest wave. The rally in the BSE is a Wave-3 extension. This is the most impulsive move in a market. When looking at the BSE chart http://blogs.mysmp.com/waveman, you can clearly see that Wave-3 is the extension Wave. Wave-1 was a total of 3,344.56 points. When you look at the third wave rally, you can see it was almost 261.8% of Wave-1.

So, what does all of this mean? Since Wave-4 has completed, we are now looking for the Wave-5 top, which will begin a new secular bear market. Based on the rules of Elliott Wave, when the Wave-3 is extended, Wave-1 will more than likely be equal in length to Wave-5. So, to come up with a target for Wave-5, we simply take the price length of Wave-1 (3,344.56) and add it to the bottom of Wave-4 (8,799.01) for a Wave-5 target of 12,143.57.

Another possiblity for the length of Wave-5 is 5,411.49. An unlikely target, but possible length for Wave-5 is 161.8% of Wave-1. This would give us a Wave-5 Target of 14,210.50. While the rules of Elliott Wave state this target is unlikely, due to the extent of the rally thus far, it is probably the most realistic target.

Good Luck Trading

Hi! Wavetrader,

So, what you are saying is that we will go to a minimum of 12,143 & a maximum of 14,210 right now.

Would be grateful if you could please reply.

Thanks & regards,
Amit

amitt29 · #4 3rd July 2006, 03:43 PM

Pray the wave 4 shud be a A,B C affair I believe.U have not marked ur corrective waves.
Also this new impulse doesnt satisfy the basic tenet of elliots that wave 4 cannot dip below the peak of wave 1,(though it has 5 waves).In this current rally we have dipped below 2960(supposed peak of wave 1) many times.
Can u explain,How we are in an impulse.
Now for ur targets.
I dont follow Sensex,so i am giving my perspective on Nifty,first the Nifty has to close above 3152,then 3185-3190 will be next to come.after that 3300.
Regards
Amit.

wavetrader · #5 3rd July 2006, 04:16 PM

Quote:

Originally Posted by Agilent

Well ... 50 views and not even one response.

Is it because you seem to have done a cut and paste job, Wave ?

No problem with that , as long as :
- you quote your source
- you add your own comments /analysis (e.g. in this case, the basics of Wave theory)

Hope my comments help in some way

AGILENT

Not, sure if you are giving me a compliment by requesting the source of my post or just being rude. Regarding "adding my own comments", I have already provided a detailed explanation of the wave structure and the price points/length for this impulsive move. I have also listed a few of the basic rules around extensions, but one thing I've learned about EW, is if you give to many "rules" in your analysis, you will be the only one who understands the formation.

I hope my response proves helpful.

wavetrader · #6 3rd July 2006, 04:18 PM

Quote:

Originally Posted by gobatman2001

Hi! Wavetrader,

So, what you are saying is that we will go to a minimum of 12,143 & a maximum of 14,210 right now.

Would be grateful if you could please reply.

Thanks & regards,
Amit

That is correct, as we approach the 12,000 level, we will then be able to apply price and volume techniques to the chart in order to determine if 12,143is it, or if we are going to make a run for 14,210.

Wavetrader

wavetrader · #7 3rd July 2006, 04:31 PM

Quote:

Originally Posted by amitt29

Pray the wave 4 shud be a A,B C affair I believe.U have not marked ur corrective waves.
Also this new impulse doesnt satisfy the basic tenet of elliots that wave 4 cannot dip below the peak of wave 1,(though it has 5 waves).In this current rally we have dipped below 2960(supposed peak of wave 1) many times.
Can u explain,How we are in an impulse.
Now for ur targets.
I dont follow Sensex,so i am giving my perspective on Nifty,first the Nifty has to close above 3152,then 3185-3190 will be next to come.after that 3300.
Regards
Amit.

The BSE has no overlap between the low of Wave-4 and high of Wave-1 as you can see in my chart analysis http://blogs.mysmp.com/waveman/. On another note, you can still have overlap in an impulsive move, it is just then categorzied as a terminal impulsive move. Which bascially sets you up for a C-Wave failure, which upon completion will retrace at a minimum to the low of Wave-2.

When I look at the Nifty, I don't see any overlap. Wave-4 which just ended in mid-June is well above the Wave-1 high, set in January '04. So, this move should not be terminal for either the Sensex, or Nifty, which is how I am making the assumption that we will exceed 14k on the Sensex. We will of course have to look at the health of the overall market when we approach the 12k level, but we will more than likely exceed this with ease.

On another note I am new to the board and I want to know if there is a way for me to upload charts, as this is the basis of my analysis? I just hate posting links.

Thanks,

Wave Trader

amitt29 · #8 3rd July 2006, 04:37 PM

Yes sure my dear friend,
When u have written ur comments,there is a button below which says manage attachments,click on that and the rest is easy.The file must be png etc.
Ok now what i am talking about is the new impulse move from 2595 which u r terming as C wave failure.So what do u think was the corrective form from 3774.
Regards Amit.

wavetrader · #9 3rd July 2006, 05:09 PM

Quote:

Originally Posted by amitt29

Yes sure my dear friend,
When u have written ur comments,there is a button below which says manage attachments,click on that and the rest is easy.The file must be png etc.
Ok now what i am talking about is the new impulse move from 2595 which u r terming as C wave failure.So what do u think was the corrective form from 3774.
Regards Amit.

This was just a simple Wave-4 correction, which retraced 50% of Wave-3 almost to the nose. Since we held above the 61.8% retracement of Wave-3 and we held above the high of Wave-1, odds are this will not be a C Wave failure.

amitt29 · #10 3rd July 2006, 05:49 PM

U mean a zig zag.
But pray I believe the wave A of a zigzag doesnot retrace more than 50% of the impulse that it is correcting.
Well i think immediate levels to watch out wud be 3220-3225 maybe in the next two days.Then if this has the strength to 3325 odd.These are my observations of course.I maybe wrong also.
Regards
Amit.

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