From Correction to Impulse: Elliott Waves in Jindal Steel power

11 Sep

Technical Analysis of JINDAL STEEL & POWER LTD. based on Elliott Wave Principles

This analysis uses Elliott Wave Theory and structures, offering one potential market scenario among multiple possibilities. The information is for Educational purposes only and should not be taken as trading advice. There is always a risk of being incorrect, and users should not make trading or investment decisions based solely on this analysis. The content does not guarantee profits, and we are not responsible for any financial outcomes. It is recommended to consult a financial advisor before making any trading or investment decisions.

Introduction to Elliott Wave Theory:

Elliott Wave Theory, developed by Ralph Nelson Elliott, identifies repetitive price patterns in financial markets, driven by investor psychology and crowd behavior. Here are some key Elliott Wave rules:

1. Wave 2 cannot retrace more than 100% of Wave 1.
2. Wave 3 is often the most powerful and cannot be the shortest of the impulse waves.
3. Wave 4 should not overlap with the price territory of Wave 1 (except in diagonal patterns).
4. Impulse waves move in five smaller waves (1-2-3-4-5), while corrective waves move in three waves (A-B-C).

Wave Counts and Analysis:

On the 2-hour chart of JINDAL STEEL & POWER LTD., the completion of Wave (4) in blue is likely at the 896 low. This corrective phase may have concluded, signaling the start of a new bullish impulse wave.

Current Structure: Wave (5) in Blue Unfolding

We may now be at the start of Wave (5) in blue, which suggests further upward momentum. Within this wave, the internal structure shows:

- Wave 1 in red of Wave (5) has been completed.
- Wave 2 in red of Wave (5) also seems to have finished, a typical pullback phase.
- Wave 3 in red of Wave (5) appears to be starting, signaling a potential strong upward move.

Characteristics of Wave 3:

Wave 3 is typically the most extended and powerful part of an impulse wave. It often accelerates rapidly, fueled by market sentiment, and can deliver outsized price gains. This wave is expected to push the stock price higher with more conviction.

Based on Fibonacci levels, potential targets for Wave 3 are:

- The first target could be 1020 (100% Fibonacci extension).
- A further target lies at 1076, the 1.618 Fibonacci extension, a common level for extended third waves.
- An extended target is 1111 at the 2.0 Fibonacci extension.

Moving Averages Confirmation:

Adding to the bullish outlook, JINDAL STEEL & POWER LTD. is currently trading above both the 200-period EMA and the 50-period EMA on the 2-hour, daily, and weekly timeframes, which signals strong strength to show upward momentum across multiple timeframes. The alignment of these exponential moving averages (EMAs) indicates that the stock is maintaining long-term support, which provides additional strength to the current bullish wave count.

Critical Level to Watch: 988

Once the price closes above the 988 level, we can expect further confirmation of strength. This price level is crucial as it would signal a breakout, paving the way for additional bullish momentum and targeting higher Fibonacci levels, such as 1020, 1076, and 1111.

Invalidation Level:

The wave count remains valid as long as the price stays above 896, the low of Wave (4) in blue. A break below this level would invalidate the current wave structure, implying that the bullish trend may be in jeopardy.

Summary:

In conclusion, JINDAL STEEL & POWER LTD. appears to have completed its corrective Wave (4) in blue, with the price now starting to unfold into Wave (5) in blue. With Wave 1 and Wave 2 in red complete, the stock is likely entering Wave 3 in red, which typically exhibits strong price advances. The stock’s upward trajectory is supported by its position above the 200-period EMA and 50-period EMA across multiple timeframes (2-hour, daily, weekly), further strengthening the bullish case. Key levels to watch include 1020, 1076, and 1111, while 988 acts as a near-term breakout level. The invalidation point for this wave count remains at 896.

I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.

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RK💕

Disclaimer and Risk Warning.

The analysis and discussion provided on in.tradingview.com/u/RK_Charts/ is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.