The Expanded Flat Wave 2 in the NSE 20 Share Index



After hitting a low of 4080.83, the Index rose in a clear three wave pattern making 'blue' wave [ a ]. The wave [ a ] is composed of waves (a) (b) and (c). Notice that wave (c) subdivides into five waves as expected of C waves (i.e Up, Down, Up, Down and a final Up move).

'Blue' wave [ b ] is also a three wave affair upto the 4017.34 low. I expect the Index to start rising imediately towards the area marked 'Target' before falling strongly in wave 3.

In an Expanded flat we expect wave [ b ] to end once wave [ b ] is 1.236 X Wave [ a ]. The extreme for wave [ b ] can be 1.382 X wave [ a ]. Below we check if this guideline has been followed.

Wave [ a ] = (4257.27 - 4080.83) = 176.44

1.236 X wave [ a ] = (1.236 X 176.44) = 218.08

1.382 X wave [ a ] = (1.382 X 176.44) = 243.84

Subtracting the above two values from 4257.27 (the end of wave [ a ] ) we'll be able to get the range for the expected end of wave [ b ]. Thus:

(4257.27 - 218.08) = 4039.19

(4257.27 - 243.84) = 4013.43

So at 4017.34 (as on 9th October, 2015) is well within the range for wave [ b ]. This is the reason why I expect the Index to start rising immediately from 12th October.


Using 4017.34 as the end of wave [ b ] we can target the end of 'blue' wave [ c ] which will also mark the end of 'green' wave 2.

[ c ] waves of flats are usually Equal to wave [ a ]; 1.618 X wave [ a ]; Twice wave [ a ] or 2.618 x wave [ a ]. Once we get these values we add them to 4017.34 (our likely end of wave [ b ] to get the end of wave [ c ].

Targets:

1. (4017.34 + (1 X 176.44)) = 4193.78

2. (4017.34 + (1.618 X 176.)) = 4302.82

3. (4017.34 + (2 X 176.44)) = 4370.22

4. (4017.34 + (2.618 X 176.44)) = 4479.26

Option 4 is very likely since that level would also meet the guideline of depth of corrective waves. i.e that is the area of the previous fourth wave (wave [ iv ]) stated as: Corrections tend to register their maximum retracement within the span of travel of the previous fourth wave of one lesser degree, most commonly near the level of its terminus.

Summary:


NSE 20 share Index should rise immediately to about 4500 and then drop dramatically.