12 November 2017


Hi Friends,

While I have been always posting all the time about what's in store for Markets ahead. Today I'm writing about how I made Money using Elliott Waves.

Yes! You are reading it Right. I made over 400% Return in JM Financial in about 1.5 years using Elliott Wave Analysis. 

Identification of Bull Market:-

JM Financial was in Downtrend since 2008-2012. It finally broke out of the Downtrend in May 2013 as visible from the above Chart. It tried to retest the Breakout and Finally closed above 21 in Oct 2013 to Confirm End of Long Term Bear Market. Once the Bull Market was Identified next step was to decide Entry Point which shall give Better Risk Reward.

Analysis Supporting Decision to Buy near 34:-

While Nifty was in Bear Cycle in 2015 I was closely watching JM Financial for Prospective Long Entry. After Identifying 3 Waves Up move in JM Financial the Correction in 4th Wave shall be the Ideal Entry for Long. 

How much Down the Correction can go?

As per the Guidelines of the Wave Principle the Correction can go upto the low of wave (iv) of one lower Degree. JM Financial was in Downtrend Channel in 2015. JM Financial took Support near 34 which is the low of Wave (iv) of Wave 3. Which also coincides with 61.8% Retracement of the Rally in 3rd Wave. Also there was a Trend Channel Support near 34 and RSI was  giving Positive Divergence. So based on all these Parameters I took the decision to Buy JM Financial near 34 in Feb 2016.
How Far Bull Market can Go?

I took preemptive Long Trade near 34 based on Signals, however actual Trend Reversal was Confirmed in May 2016 post Breakout of Downtrend Channel. Now the question arises -

Where to Book Profits?

As per Elliott Wave guidelines 5th Wave Moves in Proportion to the Length of Wave 1 through Wave 3. As visible from the above Chart JM Financial moved almost 3.618 times the length of Wave 1 through Wave 3. Though Wave 5 is still not over, it has produced very High Returns in about 1.5 years. Going forward it may not have much Room to Scale Higher in terms of Percentages. There was RSI Negative Divergence on Weekly Chart & it formed a Shooting Star Candlestick which was Sign of Trend Reversal. Hence I decided to Book over 400% Return near 175 in JM Financial in Oct 2017.

Thanks & Regards,

Harsh Dixit.