Many people are asking why there was a sharp and devastating fall in Auropharma. Was it just a news based move? Or is there any logic as per technical analysis. In fact if you study waves properly, this fall was much awaited. Let’s see Daily chart of Auropharma first to understand its current wave structure.
Here we can see counts started from 2009 as the starting point. Wave 1 was completed around 138 and wave 2 was completed around 40. Now major wave looks like completed around 891.5 in mid of 2016.
Structure of wave 4 has taken place of a complex correction. Previously I was expecting wave 4 to be completed around 512 low made on 29th May 2017 and the same should be starting point of wave 5. Though Fibonacci level were bit away but structure was perfect as a flat correction with B making new high around 895 just above the end of wave 3. But the structure turned out to be complex with wave X and not an impulse as wave 5. So finally we have abcXabc as double threes as of now.
While looking to Fibonacci retracement 50% level is broken and next 61.8% is around 365 when we compare 2 to 3 distance. While comparing two abc, 1.23 level is coming around 357. So 357 to 365 is a very good level to take support.
Now let’s analyze last abc cycle and see ratio between a and c. for that we will see 2hr chart.
When we are looking ratios between a and c, there is a level of 370 is coming as 90% and for A=C level of 340 is coming which may come or may not come. But overall range of 355 to 370 looks good for ending this cycle of abc.
After that either wave 5 should start as a motive wave or there are possibilities that we may see another abc cycle. For that new X needs to start to have structure of abcXabcXabc. But the probability of abcXabcXabc is very minimal as wave 4 is giving deep retracement. So there are majority of chances to have start of wave 5.
Disclaimer:- Idea and views given here are only for educational purpose. It is just to show how Elliott wave analysis can be done in practical example. Do not take any trade only on the basis of idea given
here. Consult your financial advisor first before taking any trade. We do not take any responsibility for any trade taken by whatsoever means or purpose.