Last week, we focused on RSI as a Buy or Sell signal. This week, let us look at what the Elliot waves say.
Elliot helps in taking a longer term view of the markets.
The chart is of the entire up move started from Covid low bottom of
Wave 1 7552 - 18604= 11052 points. This took approx 19 months)
Wave 2 18604- 15191= 3413 points (31 pc correction) approx 8 months
Wave 3 15191 and ongoing since July 2022.
Wave 3 targets could be 26243, 29249 or 31760
Elliot does not put too much focus on the time lines but on price.
Implications for the longer term:
Once Wave 3 gets over at approx 29k then entire up move from 15k to 29 k will corrected. This can easily take 12 to 18 months. Post this 1 more rally of 10 12 K points and then a multi year correction.
Let us re visit this hypothesis end of May when the wave 3 will be closer to maturity.
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