Am posting soon.

If you look at the sentence I have underlined, do you know the reason you have said that?

If you read The Wave Principle of Human Social Behaviour you'll find out the why.



It is called linear thinking. And don't worry. Majority of people practice it.

Basically you contend that the market will continue falling because it has been falling. Read that sloowwlly. And it means you are predicting the past.

NSE20 aiming for the 4000pts zone.

Here is the analysis.

I have looked at the NSE 20 share Index Chart several times and as yet I don't see any responsible way to label the fall from March '2015 high of 5499.64 as a continuing C wave.

My reasons are as outlined below.



I posted a similar chart this year. The labels are maintained except that in the case I am outlining now, black wave (B) is not complete. Instead, the rise from the Nov. 2011 low of 3103.04 (here labelled as green wave X) upto the Mar.'15 high of 5499.64 is labelled as an impulse wave [a] (in blue colour). The pattern is clearer in a chart from www.investing.com which I'll use to analyse the short term.

From the outset, I believe that a large Elliott Wave flat pattern is forming in the NSE 20 Index ever since the all-time top at 6161.46.

A flat consists of waves A, B and C where wave A is a three (i.e a corrective pattern), Wave B is a three and Wave C is a motive wave (a diagonal or an impulse wave, or simply a five-wave pattern). In our case here, black wave (A) of the flat consists of a zigzag (i.e green waves A, B and C). Black Wave (B) is the formation currently underway and should eventually consist of green waves W, X and Y.

W, X and Y are compound waves consisting of simpler corrective patterns (In Elliott Wave Literature the simple corrective patterns are ZigZags (5-3-5), Flats (3-3-5) and Triangles (3-3-3-3-3).

Now, there are rules pertaining to the formation of flats. Rules must never be broken. The guiding rule in this case is that in a flat, the B wave is always at least 90% of the A wave.

Now, if I assume that black wave (B) ended at 5499.64 in Mar.'15 then how much will it have retraced wave (A)?

Black wave (A) = {6161.46 - 2360.01} = 3801.45

If black wave (B) ended at 5499.64 then

Black wave (B) = {5499.64 - 2360.01} = 3139.63

3139.63 /3801.45 = 82.59%

i.e black wave (B) will be 82.59% of wave (A) and therefore less than the required 90%.

This therefore suggests that we should expect the NSE 20 Share Index to rise at least above 5499.64 level before calling the end of wave (B). And this is why I have hinted in the past that the Index should rise soon.

And there are targets to aim for as outlined below:

Target 1:

In a flat correction, the B wave is usually a Fibonacci 1.236 times the A wave.

Black wave (A) = {6161.46 - 2360.01} = 3801.45

Wave (A) X Fib. 1.236 = Wave (B) = {1.236 X 3801.45} = 4698.59

Adding 4698.59 to wave (A) low in order to target the end of wave (B):

4698.59 + 2360.01 = 7058.60

A mind-boggling target now.

Also, the B wave of a flat should not exceed Fib. 1.382 times the A wave, thus:

1.382 X 3801.45 = 5253.60

Adding this to wave (A) low gives

5253.60 + 2360.01 = 7613.61

We should not expect the rise to exceed 7613.61.

Target 2:

Another way to target the end of the black wave (B) is to consider the relation between waves W and Y. We look for a Fib. 0.618, equality, Fib. 1.618, double wave W or a Fib. 2.618.

Green wave W = {4678.1 - 2360.01} = 2318.09

If wave Y should equal Wave W then:

2318.09 + 3103.04 = 5421.13 In this case 5499, a level beyond 5421, was hit.

We however, expect a much farther wave Y, the next level should be a Fib. 1.618 X wave W:

So 1.618 X 2318.09 = 3750.67

Therefore,

3750.67 + 3103.04 = 6853.71

Summary:

Elliott suggests as per our discussion above that the current fall in the NSE 20 Share Index is temporary. My expectation is for the NSE 20 Share Index to do a spectacular rise above 5499 in the coming weeks.

It boils down to what are the best pick for shares that are down the wave A B or C that will rise exponentially when there is a correction after this temporal situation has corrected itself ,just a general question .

Pesanane hinted britam , KCB and some others .what are yours @mnadii

The NSE 20 Share Index is an index of about 20 stocks. Individual stocks may perform better or worse than the NSE. To trade a stock I would want to analyse its Elliott Wave pattern which I don't do presently. I was really looking forward to the market for derivatives but as always the powers that be are all talk and little action. The derivatives market would be nice to play because of the instantaneous settlement.