Wednesday, September 05, 2012

Bharti - Elliott Wave Update

Bharti Weekly Chart
Elliott Wave Analysis
Bharti has been suffering steep falls for past few weeks, the long term triangle scenario has been invalidated. We pointed out in our last post that we may see some support coming in the region of 250-220. Now again we seem to have completed a 5 wave sequence in wave I, and we can expect a rally albeit in 3 waves (wave II) to correct this impulsive down move from 450 odd levels marked as {II} on the chart above. If the pattern we are counting is right we may see further downsides once this correction is done with. I would not suggest long at this juncture, but if we see prices rising in 5 waves One can surely look to buy the next 3 wave correction, for a target in the range of  345-70.
Technical Analysis
  1. We have fallen hard after a Fast Fall setup.
  2. We have support in 250-220 range. Resistance around 310-345-370.
  3.  ST and RSI are oversold on weekly chart, we can spot +ve divergences on daily chart. MACD is in bearish territory on weekly chart, but we can spot a bullish crossover on daily chart.
  4. We should see prices moving further up if we trade comfortably above 265 levels. SL would be 238.
  5. So for a gain of 107 points at 345 levels we are risking 27 points, that's a reward to risk ratio of roughly 4, and that not bad.

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