This Elliott Wave Analysis report of Axis Bank is follow up of my previous analysis I posted in Nov 2014. Click on Elliott Wave Analysis of Axis Bank by Deepak Kumar on 04 Nov 2014 to read my previous report. I was expecting higher levels for Axis Bank in quick time and those levels also achieved as Axis Bank bounced till 654 before start of corrective decline.
I prepared this report on request of my close friend as he had position in this stock at higher levels above 600. So, let me start with a monthly chart covering move of last 12 years.
This is monthly time bar chart of Axis Bank covering move after 2004. By seeing the whole structure it seems Axis Bank is somewhere within inner wave (iv) of Bigger wave (3) on long term chart. Inner wave (ii) retraced exactly 61% of (i) and (iii) seems completed well above 161% projection at 654.
Now, wave (iv) of (3) may be in progress which already achieved 23% retracement whereas 38% retracement is placed at 463 which may or may not be achieved.
Let’s have a look at the correction from 654 on daily chart to analyze its inner waves.
This is Daily time bar chart of Axis Bank to show correction after 654 which I expected as start of inner wave (iv) of bigger (3). The move marked within red circle is the wave which I analyzed in Aug-Nov 2014 expecting higher levels.
By seeing the structure of decline, it seems inner waves (a) and (b) is completed whereas wave (c) is in progress. 100% projection for wave (c) is placed at 465 which is also near 38% retracement of whole wave (iv). Whereas 123% projection of wave (c) is placed at 430 which is near the end of inner wave (1) of last upside impulse started from 369. So, levels of 465-430 can be seen before upside rally for new high.
These are the possibilities which I can expect by having causal look and calculations on long term charts.
Investment Opportunities in Axis Bank Stock:
If someone want to invest in this stock for medium to long term than he can accumulate in 465-430 range with stoploss of another 30 points for targets above 654 in coming months or years.
But personally I never invest in stocks which already have given the move of wave (3) or which are already at the top of wave (3). There is no doubt that this stock can achieve higher levels may be 1000 or 1500 in long term but the possibility of returns will be 100%-200% or may be 300% in coming years even if it goes to 1500-2000.
For long term investment, I always search for the stocks where wave (3) on long term is just started or yet to start because the scope of return is really high there. It may take time to start wave (3) but when it starts it always give multi-fold minimum return of 600%-700% and maximum there is no limit and we have 1000s of stocks listed on NSE and BSE where we can easily find 10 stocks in this position.
Let me show you my secret of Identifying Multi-Bagger Stocks (Only for long term investment):
If you see any stock still consolidating around 2008 highs (bit higher or lower) same as shown in within black circle on Chart 1 then you can bet on that stock for multi-bagger opportunity. The idea is only that most of the stocks completed bigger wave (1) in 2008 and the stocks which are still consolidating around 2008 highs have not started its dream run of wave (3) yet. It may take some time to start wave (3), may be some months or year but when it starts, most probably it is going to rise multi-fold in very quick time. It can give to 600%-1000% returns in just a year.
No need to care about fundamentals or technicals when you are using Elliott Wave Theory as Fundamentals can change within months and technicals changed with price action. If you manage to identify at least 10 stocks in this position and invest in all 10 in equal quantity then even if 2 out of 10 performs and rest 8 becomes zero, most probably you will be in double profit. (But rest 8 can never be zero)
Stocks which started wave (3) from same consolidated patterns you can check are TVS Motors, Aurobindo Pharma, Apolo Tyres, recently in last year bounced Dish TV etc and many more. Just check their monthly charts of last 12 years and compare. But avoid those stocks which are way down below their highs, select the stocks only which are repeatedly consolidating near their all time higher after more than 61% correction.
Please don’t ask me about those stocks. Take some pain and search yourself, check monthly charts of last 12 years, you will definitely get some. May be these stocks are just waiting for the start of Dream Run of their life in next bull rally of Sensex.
Why every trader/investor must have knowledge of Elliott Wave Theory:
Every trader and Investor must have knowledge of Elliott Wave Theory even if you don’t use it as main weapon. If my friend had carried the knowledge of EWT and could have seen monthly chart of Axis Bank of last 10 years then he could have hesitated before investing at higher levels.
Fundamentals of a company or techicals are not permanent, it doesn’t take time to change but Elliott Wave Principles can help you to take right decision, even if not, it will definitely stop you take wrong decision. A common investor always invest in stocks which is famous and in news but a stock become famous only after its real action. Most of the famous stock already has completed its dream run of wave (3) and common investor invests during wave (5) and often gets penalized. There are many hidden gems with multi-bagger opportunities and EWT can help you to find those hidden gems. So, you must learn EWT yourself if you want to get maximum out of stock market both in trading as well as investing.
Read the article Personalities of Elliott Waves to understand how a common investor makes mistakes.
Read this article to find long term charts of Indian Stocks: Free Live Charts to Use for Elliott Wave Theory Analysis
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