Today we are going to analyze Tata steel as per Elliott Wave Theory.
For that let’s start with weekly chart of Tata Steel.
In weekly chart we can see that major 1 and 2 is completed and major 3 is running. With wave 3 it is clear that 1 and 2 of 3 is completed. Either 3 of 3 is completed or still in progress. To understand 3 of 3 we need to go to lower time frame. So for that we will see chart of Tata Steel daily.
When we analyzing daily chart of Tata steel it looks like 3 of 3 is completed but sub wave is not very clear and visible. So there are two possibilities with us.
1. Where 3 of 3 is completed and 4 of 3 is in progress
2. Where 3 of 3 of 3 is completed and 4 of 3 of 3 is in progress
We will analyze both the possibilities one by one. As per above chart we will see for option 1 where 3 of 3 is completed. If 3 of 3 is completed 4 of 3 has given 50% retracement at 421.7 levels. Bottom of (1) is at 455.15. One can sell Tata steel if goes above 422 with SL at 455 for the target below 320 as 4 can not enter in 1.
Now let’s see chart for option 2 where 4 of 3 of 3 is in progress.
Suppose 4 of 3 of 3 is in progress as irregular wave as marked above, it is very near to end and looks like one more high is pending. In this case also trade is there to sell only for the target below 320 to complete wave 3 of 3.
So in both the option trade is coming out to sell Tata Steel above 422 with SL at 455 for the target of more than 100 points which is below 320.
Disclaimer:- Idea and views given here are only for educational purpose. It is just to show how Elliott wave analysis can be done in practical example. Do not take any trade only on the basis of idea given here. Consult your financial advisor first before taking any trade. We do not take any responsibility for any trade taken by whatsoever means or purpose.