Sharing few latest charts based on my learning on combining Stage-Based investing with Elliot Waves method.
Would request contributions from other EW and Stage Based Investing practitioners.
For starters, just sharing 2 images wrt Stan Weinstein Stage Based investing rules as well basic EW theory .
Stages in Price-Life-Cycle
stageinvesting1080×584 95.2 KB
Stage Investing method is good for long term investments and is based on tracking price movement on weekly charts wrt 30 weeks moving average.
The best entry in a stock is when it breaks out in Stage 2 and exit should be made when it enters Stage 4.
Stages are clear in the above pic.
Elliot Wave Theory:
Elliot Waves principle is based on mass-psycology principle and as per this theory ,every stock moves in 5 waves (up or down ) and then corrects in 3 waves (a,b,c)
Here are few examples of stage based and EW method.
**Sell in Stage 4 or when 5 Elliot waves are complete **
One of the key rule is that you don’t buy or stay in any stock that is in Stage 4.
Because you don’t know how far it would go in to correction-phase.
FB & Netflix are 2 recent examples (charts are given below)
FB_2022-04-21_06-29-331151×608 114 KB
NFLX_2022-04-21_06-31-281151×608 113 KB
Buy when the stock enters in Stage 2 or new impulsive EW starts:
Combining Elliot Waves with Stage-based investing :
The following chart is of CaterPillar - a US based company involved in farm machinery, construction etc etc.
Here one can see how these 2 methods can be combined - stage-analysis + Elliot Waves.
CAT_2022-04-21_06-17-571151×608 91.7 KB
Caterpillar is in Stage 2 and now also in bigger Wave 3 . EW can help in calculating the future targets - for example , CAT (CMP -235) may go upto 500 in coming months as per equality principle of EW .
Again all of these are probability set-ups. Risk management is key whether one invests on the basis of fundamentals or by doing technical studies.
Would love to hear the views of other technical analysts who follow these methods.
22 Likes Dr Lal PathLabs a well recognised brand in the Diagnostic Sector StageInvesting 2Sharing Gold Chart (CMP 1951)
As per this , Gold is in stage 2 and is progressing well .Stage 2 is an ideal state to be in for a longer term investment.
GOLD_2022-04-20_09-22-241151×608 98.2 KB
As per Elliot Waves count, as of now, gold is pulling back in minor wave ii of Wave III (of larger Wave 3)
GOLD_2022-04-20_09-21-461151×671 99 KB
Longer term target wave 3 is US $3000 /Oz whereas shorterm resitance is 2072.
As gold has global economic implications- the movement and timelines can be very different as compared to individual stock-movements ( though 3rd waves happen to move faster than wave 1 or Wave 5 , but still in case of gold the speed is relatively slower as compared to any individual stock)
3 Likes StageInvesting 3Rossell India
Nice set-up - volumes also building up -Stage 2 as well as Wave 3
Long way to go.
ROSSELLIND_2022-04-21_13-09-311729×859 126 KB
Kirloskar Ferrous
Other beautiful set-up - Stage 2 as well as Wave 3 - should do well as volumes also good.
KIRLFER_2022-04-21_13-22-421707×935 97.1 KB
Keep in consideration that, none of these are investment advise. These are just studies for tracking how these two mehods work when combined with each other.
1 Like Jiitt007 5It’s very easy to (draw/comment) spot buy/sale point after completing the chart/pattern with maximum accuracy. But It’s way far more difficult to predict the future price direction. correct me if I’m wrong!!!
6 Likes StageInvesting 6Future prediction can never be accurate - it is just a game of probabilities . You find the best probabilities based on patterns and play along keeping your risk-management tools.
In the above charts - have given longer term targets for Gold, CAT as well as shared good set-ups of Rossel India and Kisrloskar Ferrous ( can give targets for these 2 also).
Keep a track on these 4 set-ups and see whether these work in future. We can only tell in future whether these worked or not. Better to keep a track to develop a trust on any system/method.
2 Likes StageInvesting 7Thermax -other beautiful set-up
THERMAX_2022-04-21_15-08-011722×916 131 KB
In Stage 2 from November 2020
Decent volumes accumulation at every levels.
Now in wave iii of larger wave 3.
As per technicals - 1st target close to 2800-3000 ( channel top)
Long Term target - close to 6000 - equality rule - wave 1=wave 3
Timeline - the most difficult to predict .
Risk Management : The best way to ride the trend is to track 30 week moving average . If it cracks 30 WMA decisively with volumes, one can exit.
Again - not an investment advise- just sharing for interested - ones to track and check whether Elliot waves +Stage Analysis work !
3 Likes StageInvesting 8Max Healthcare
MAXHEALTH_2022-04-21_17-48-501735×907 110 KB
Another good set-up- in S2 and seems to ave started the new wave.
Short term target can be near 600 (channel top) but long way to go.
Next entry can be after a pullback from current levels as it has run a lot in last few days… a retracement and green closing after that can be 1st entry point.
One can track it with 30 week moving average for exit-signals.
Just for learning purposes.No recommendation at all.
3 Likes StageInvesting 9ICICI Securities
A stock in Stage 4 and that has completed 5 EWs , now going in ABC correction.
ISEC_2022-04-22_08-43-521751×955 134 KB
As the stock enters stage 4, it is an exit call for a long term investor as one does not know how far it can go in downtrend ( price or time-wasting)
Now it is at a crucial level, if it breaks belwo 578 with volumes- a further downslide is expected.
2 Likes StageInvesting 10Elecon Engineering
ELECON_2022-04-22_09-51-511731×917 172 KB
Another good set-up to watch out
Early days in Satge 2 , and starting new wave.A break over all time high of 215 would be next confirmation point.
2 Likes umesh22 11
image1926×1458 209 KB
is this in stage 2?
Godawari Power (GPIL)
Another stock in Stage 2.
GPIL_2022-04-22_10-40-491741×930 144 KB
Moving up in bigger Wave 3.
Currently correcting in wave ( iv ) of Wave ( I ) with in bigger Wave 3 .
Wave (v) whould follow to complete Wave ( I ) and then a correction in Wave (II). Bigger Wave 3 would be completed once we go through impulsive Wave (III), corrective Wave ( IV) , impulsive (V) …and then a correction in Wave 4 and so on.
Keep in cosideration that overall sector movement/trend is also improtant when we track a stock.
Risk Management
One can ride till it does not break 30 week moving average , but if someone really wanna stick for very long term , 40 week moving average can be used as a risk-management tool.
Yes.
Here is the likely path.
JKIL_2022-04-22_11-31-141766×951 227 KB
Previous ATH is the first resistance.
Should go there and come back to retest and then it should rebound- that would be the ideal set-up
Keep in mind that these are probability set-ups based on pattern studies. There is no certainty - risk management is the key.
If money-making was so easy, everyone would be travelling in Ferari
4 Likes StageInvesting 14Vimta Labs
One more set-up in Stage 2 - starting wave iii of (III)
But needs volume to gain momentum.
VIMTALABS_2022-04-22_13-08-181745×921 166 KB
1 Like StageInvesting 15HAL
Hindustan Aeronautics -A PSU-Defence Sector stock
CMP 1710
In S2 stage and good wave structure -should go long way.
HAL_2022-04-22_13-33-151766×1015 125 KB
Disclaimer- Holding as part of long-term portfolio.Not a recommendation, just sharing the chart structure.
1 Like StageInvesting 16Alphabet -Google
Another one of FAANG enters in Stage 4
GOOGL_2022-04-24_17-33-501760×742 132 KB
Netflix, FaceBook - already rolling in dust.
Amazon still hanging on with a thin rope and Apple too is struggling.
HIMSHAH 17Check TEXMACO RAIL, HT MEDIA , jagran , all start of stage 2
StageInvesting 18Nifty 50
Hanging like a Trishanku between S3 and S4.
Will Fed kill the US markets by taking real action as per its recent rhetoric or it would reverse its stand on hiking intrest rates?
If Fed really follows up what it is saying , we might see Nifty as well as many global indices may plunge deep into S4.
NIFTY_2022-04-24_18-28-391127×463 82 KB
1 Like StageInvesting 19TexMaco is far above the moving averages, RSI overheated, heading towards channel-resistance -EW also lot of 1-2,1-2 waves -as per technicalanalysis rules, one should avoid fresh entry .
TEXRAIL_2022-04-24_18-53-211129×571 110 KB
Waiting for channel breakout and restest thereafter might be the right entry place + keep a watch on overall market sentiments in coming days.
HT Media- hanging with very thin margin in S2- Daily/Weekly MACD still in sell-zone- has broken 20 DMA - so at a caution zone.
Jagran :Looks ok- but needs to break 78.50 & later-on its recent ATH decisively and retest -only then we can see a bigger move .
All the above views are in context of long-term - I don’t see charts from 5-7% moves. I only see check them if there are bigger moves coming.
4 Likes viveksukumaran1 20What’s your observation on Cupid, and NGL Finechem
