elliot wave projection - 2nd scenario (more probable)

 

1) Key pivots used (from your uploaded monthly series)

I’m using the following monthly closing pivots (rounded to sensible precision):

• Covid low (2020) = ₹235.20 (your CSV / earlier discussion)

• Jan-2024 high (Wave-1 top in the bullish count) ≈ ₹1,700 (your chart / earlier statements)

• Mar-2025 low (the recent corrective low / Wave-2 low in bullish count) = ₹649.85 (appears in your uploaded monthly file)

• Latest monthly close (Dec 2025 in your file) = ₹870.10

• 2018 peak (prior large cycle top) ≈ ₹2,000 (reference level mentioned earlier)

If any of these exact pivot values differ on your side, tell me the corrected figure and I'll immediately re-run the numeric section — but the analysis below assumes the numbers above.

---

2) Two clean Elliott counts (textual)

PRIMARY / MOST PROBABLE COUNT — Super-bull scenario (Wave 1 → Wave 2 → now Wave 3)

• Wave 1 = Covid low (₹235.20) → Jan-2024 high (₹1,700)
  → Wave-1 length = 1,700 − 235.20 = ₹1,464.80

• Wave 2 = Jan-2024 high → Mar-2025 low (₹649.85)
  → Wave-2 retrace ≈ (1,700 − 649.85) / 1,464.8 ≈ 71% of the entire Wave-1 rise (deep correction — still valid as Wave-2)

• Conclusion: The pattern is textbook for a supercycle: a large impulsive Wave-1 followed by a deep Wave-2. Wave-3 is now in play (starting from the Mar-2025 low). Wave-3 is the longest & strongest impulse.

Primary Wave-3 price projections (measured from Mar-2025 low = base):

• Wave-3 (equality): Base + 1.0 × Wave-1 = 649.85 + 1,464.8 = ≈ ₹2,114.7

• Wave-3 (common): Base + 1.618 × Wave-1 = 649.85 + 1.618×1,464.8 ≈ 649.85 + 2,370.0 = ≈ ₹3,019.9

• Wave-3 (big extended): Base + 2.618 × Wave-1 ≈ 649.85 + 2.618×1,464.8 ≈ ₹4,483.9

(So the realistic primary targets are ~₹2,100 as the conservative Wave-3 target, ~₹3,000 as a common extended Wave-3 target, and ~₹4,400+ only if IndusInd produces a monster, multi-year extended Wave-3.)

Timing (probabilistic): Wave-3s usually play out over 12–36 months, typically 12–24 months for the bulk of the move. So expect the bulk of move toward ₹2,100–₹3,000 to occur over the next 12–24 months from the Mar-2025 low — i.e., most of that gain likely in 2026–2027 (not weeks).

Invalidation for this bullish count: a monthly close below the Mar-2025 low (≈₹649.85) would invalidate the “Wave-3 started” interpretation. If that monthly low breaks decisively, we must re-count.

---

ALTERNATE / MORE CONSERVATIVE COUNT — Extended Wave-5 / slower finish

• This count views the 2020→2024 rally as part of a longer impulse where a final Wave-5 (cycle) is still completing. In that world, the post-2020 price action is still a multi-year construction and the final top is lower/more moderate than an explosive Wave-3.

• Conservative numeric targets for this alternate scenario:

  • ~1.15× Jan-2024 high ≈ ₹1,700 × 1.15 ≈ ₹1,955

  • ~1.5× Jan-2024 high ≈ ₹2,550 (less likely unless strong re-rating)

• Timing (probabilistic): this view expects a slower, choppier advance and completion of the final leg by 2026–2028 (wave 5 grind).

Invalidation for this alternate count: if price begins to accelerate strongly (very high volume thrusts breaking above ₹1,200–1,400 with follow-through) — that would favor the Primary (wave-3) count. Conversely, a roll back and monthly closes below the Mar-2025 low / low-620 band would knock down both bullish counts.

---

3) Probability weighting (my best judgement)

• Primary (Wave-3 started) — ~60% probability (most consistent with the large Wave-1 + deep Wave-2 structure and the nature of the Mar-2025 low)

• Alternate (slow Wave-5 finish) — ~35% probability (valid, but less aggressive, keeps bigger cycle count)

• Bearish re-count (bearish structural change) — ~5% (requires monthly breakdowns and/or severe negative fundamental shocks)

---

4) Short numeric cheat sheet (rounded)

Using base = Mar-2025 low = ₹649.85, Wave-1 = ₹1,464.8:

• Wave-3 = 1.00 × Wave-1 → ₹2,115 (conservative primary target)

• Wave-3 = 1.618 × Wave-1 → ₹3,020 (normal extended target)

• Wave-3 = 2.618 × Wave-1 → ₹4,484 (highly extended)

• Alternate conservative top (Wave-5 style) → ~₹1,950

• Alternate aggressive top → ~₹2,550

(You can treat ₹2,100 as the first major price objective to validate sizeable bullishness; surpassing ₹3,000 is a structural re-rating.)

---

5) Practical trade plan (how to act, not just theorize)

Objective: Participate in a probable multi-year Wave-3 while protecting capital.

1. Entry (staggered / barbell):

   • Initial tranche (30–40%) at current range (₹800–950). You already have price near ₹870 — that’s a reasonable initial exposure if you accept longer time horizon.

   • Add tranche (30%) on clear technical confirmation: a weekly close above the nearest strong resistance (practical level: weekly close above ~₹1,150–1,250) with above-average weekly volume.

   • Final tranche (30–40%) on breakout / momentum proof — e.g., sustained weekly strength and new highs above ₹1,700 (confirmation of structural breakout).

2. Stops / invalidations:

   • Hard invalidation stop: monthly close below ₹649.85 (Mar-2025 low). If monthly closes below this level occur, the primary bullish count fails — cut back exposure aggressively.

   • Tactical stop for initial tranche: weekly close below ~₹720 (adjust to personal risk tolerance) — recommended only if you’re shorter-term.

   • Use position sizing so that the capital risked (distance × position) equals whatever percent of portfolio you’re comfortable losing (e.g., 1–2% total portfolio risk).

3. Targets / take-profits (staged):

   • Partial trim at ~₹2,100 (first objective), lock in some profit (20–40% of the position).

   • More trimming at ~₹3,000 (if reached).

   • If price extends past ₹4,000, convert to trailing stops — this is windfall territory.

4. Position sizing suggestion: Risk only 1%–3% of portfolio on the trade (depending on conviction). For example, if you risk 5% downside (from entry to tactical stop), your position should be sized so that that 5% equals 1–2% of your portfolio.

5. Risk management rules (non-negotiable):

   • Do not pyramid without confirmation (volume + higher highs).

   • Reassess after each 25–40% move — re-run wave count.

   • Use trailing monthly stops when the trade is well into profit.

---

6) What would force a re-count (clear invalidations)

• Monthly close below Mar-2025 low (≈₹649.85) — invalidates the primary Wave-3 start and forces alternate/ bearish re-count.

• Failure to make higher highs after prolonged up move (i.e., a strong rally that fails to hold, forming a lower high) — reduces likelihood of extended Wave-3.

• Material deterioration of banking fundamentals (large credit costs, systemic issue, regulatory shock) — would shift probabilities strongly to the downside.

---

7) Sensitivities & assumptions (be explicit)

This Elliott analysis assumes:

• No dramatic structural shock to Indian banking (e.g., sudden systemic NPAs, severe regulation that derates private banks)

• Macro / market environment doesn’t enter severe global risk aversion that crushes all cyclical financial names

• Your monthly CSV is correct and the pivots used above are accurate (esp. Mar-2025 low = ₹649.85 and Jan-2024 high = ₹1,700)

If any of those assumptions break, re-count will be necessary.

---

8) Quick checklist you can use weekly/monthly (actionable)

• Weekly: look for higher lows and higher highs; watch volume on advances.

• Monthly: track monthly close relative to ₹649.85 — if that breaks, stop and re-count.

• If price trades above ₹1,150–1,250 on weekly closes with volume, probability shifts strongly in favor of a sustained Wave-3.

• If price reaches ~₹2,100 without structural weakness, reduce exposure and manage risk (first significant profit taking).

---

9) Final plain-language summary

Using your monthly series and the clean pivots you provided, the highest-probability Elliott-wave read is bullish: the huge Covid→Jan-2024 move looks like Wave-1, the deep Jan-2024→Mar-2025 correction looks like a Wave-2, and Wave-3 has the highest chance of now being in motion. Numeric targets from the Mar-2025 low (≈₹650) are ~₹2,100 (first objective), ~₹3,000 (strong extension) and extreme extended scenarios above that. This is a multi-year move (expect most of it in 2026–2027), and a monthly close back below the Mar-2025 low would invalidate the bullish count.

Key rule to remember

Elliott Waves measure emotion → emotion spikes don’t care about time.

• Wave 1 builds confidence slowly

• Wave 2 destroys confidence fast

• Wave 3 restores confidence rapidly

Time compression is normal.