Point & Figure charts filter out noise and focus purely on structural price behaviour. On the latest P&F print, Reliance is very close to trigger the 1335-1340 zone – a level that marks a clean breakout on a 1% box, 3‑box reversal chart.

The daily candlestick chart is showing the same shift -would trigger an inverse Head & Shoulders – on a close above 1325, a pattern that often signals a transition from distribution to accumulation. (Perhaps this could become, a 3rd touch point on a trendline from ATH, back up a bit and then pierce the trendline)

This comes at an interesting time for the broader market. The cap-weighted Nifty has been a relative laggard vs equal-weighted Nifty, largely because heavyweights like Reliance and HDFC have acted as a drag. A structural breakout in Reliance doesn’t “fix” that on its own – but it could remove one of the key pressures that has capped Nifty’s momentum in recent months.

When structural signals align across methodologies – one time‑agnostic (P&F) and one time‑based (candlesticks) – it’s worth paying attention. Not as a prediction, but as a reminder that markets often communicate turning points through price long before narratives catch up.

The Pound collapsed 12% the next day, and global equity markets reacted sharply.

Looking back a decade later, being “right” on a big call undeniably feels good — but that’s only a side benefit.

Markets are humbling. What matters far more is having a methodology that defines your downside ahead of time, forces you to accept risk without ego, and keeps you grounded when narratives get loud.

The real utility of Elliott Wave and Technical Analysis isn’t about predicting headlines. It’s about recognising inflection points early, sizing risk small, and staying open to outcomes the consensus hasn’t priced in yet.

Here’s a look back at that conversation from 10 years ago: https://www.youtube.com/watch?v=zJV8TPW1otI

What is one market lesson from the last decade that has changed how you view risk today?

#Nifty #Brexit #GBPUSD

What is one market lesson from the last decade that has changed how you view risk today?

Yet structurally, the larger trend kept asserting itself.

Back in 2011, when I projected a long-term depreciation cycle toward levels that seemed improbable at the time, the overwhelming institutional consensus was still looking for Rupee strength — some forecasts even projected 38/USD.

Again in 2013. Again in 2017. Again in 2019.

Today, with USDINR continuing to print historic highs even in 2026, it raises an interesting question:

How much of market behaviour is truly driven by the “reasons” we attach to it afterwards?

And how often do those reasons simply emerge after the structure is already in motion?

One of the most misunderstood aspects of Elliott Wave analysis is that it is not attempting to predict news, economics or events.

It attempts to identify the underlying behavioural structure of markets before consensus narratives adapt to it.

The uncomfortable reality for many fundamental frameworks is that markets often move first — and explanations arrive later.

Not always. But often enough to matter.

That distinction becomes especially important at major turning points.

As can be seen from the monthly chart of S&P 500, the momentum for the Index has been dropping precipitously with each new high. (The loss of momentum is pretty much the same on Nasdaq & Dow as well). Under the Elliott Wave Model, I see the move from Dec 2018 as start of the 5th wave for S&P for the bull run that began in 2009. The wave principle states that two of the impulse waves tend towards equality. This is shown in the chart above.

Incidentally, Oct 2019 is 144 months from the high of financial crisis high – a very important Gann number. Invariably, significant highs and low’s get registered from previous peaks and troughs (with a very tiny bit of tolerance on either side of this number)

Other Indices:

The Dow Jones Industrial is yet to clock record high. While it’s not far off  and it may even clock fresh high in the next couple of days, it is lagging. We can even ignore this but:

The Dow Transports and the small cap Russell 2000 (shown in the chart above) indices are over 10% from their record highs.

The famous FANG stocks which have been an important cog in this bull run are all lagging. Google while close to its all time high, failed to cross 1290 for the 3rd time. To clock fresh all time high – Netflix needs 45% +, Amazon 15% and Facebook 14%.

Sentiment:

At the record high of 3050 on the S&P reached couple of days back, the sentiment readings are very elevated. The number of futures traders who were bullish reached 80% (courtesy Daily Sentiment Index).  I’ve seen this reading go to 95% but this is at the extreme zone.

Here is another picture:

As I have shown on the monthly chart of  the S&P,  Wave 1 is right now = Wave 5. A sentiment equality could also be shaping up. In May 2011, Bin Laden was killed by US forces, post that , the S&P dropped 20%. Here just before the 3050 high, Al-Baghdadi has been killed by the US forces. This is once again being hailed as big amelioration of Geo-politcal risks for the market. Will history repeat?

I had spelt some of these thoughts on BQ here:

Chart 1: Nifty vs SensexNifty’s price action of the last week has thrown up a couple of possibilities.

(a) Bull case:  My interpretation that the Index registered a major top in June 2019 was premature. OR

(b) Bear case: A major top is in place and the events of last week simply interrupted the decline.

If we consider (b) as the case, that leaves us with two possibilities. Either the index hasn’t got much upside beyond the 11700-750 ball park or the index is going to fail just under the record high of 12103.

This leaves us with a couple of interpretation under the Elliott Wave model and in both cases, the bounce is a correction. Did the correction start from August low as an irregular correction or did the markets see a ‘truncation’ in September due to an unforeseen event is the question to be answered. (For those who want to get technical under EW, the decline from 12103 ended a five step minor degree A or 1 at the Aug/Sep low and markets are on a corrective minor degree 2 or B)

The important takeaway from this is that we need to be on guard – Indian equities could reverse suddenly without much warning as the upside could be done or very limited.

If we consider the case (a), the reasonable and sensible way to interpret the price action seems to be an ending contracting diagonal under the Elliott Wave model. Under this interpretation, the upsides are a little bit better but doesn’t seem like one should build a big portfolio expecting a multi-year upside. The upsides may not last beyond a few weeks to a few months.

Chart 2: Nifty Weekly 3-3-3-3-3 ending diagonal

Bottom Line: To me, it makes eminent sense to wear a trader’s hat and not an investor’s hat.

When one is a Billionaire, one can say whatever one wants and try to pass it as wisdom or gospel truth. Let us examine these words of Avuncular Warren a little closer.

First, as Mr Buffett has rightly noted, there were no index funds back in 1942. What is unsaid and absolutely critical is that the first index fund was not around until the 1970’s. So an investor would have needed all the sophistication to track the key stocks by market value, assign/reassign weights, balance/re-balance the portfolio and all that jazz that an index fund or an ETF does these days.  Remember, at its 50th anniversary of formation, the S&P500 had just about 80 odd of the original 500, and the 400+ companies had either gone bankrupt, been taken over or dropped off the index. So for 30 years! Was a normal investor expected to do that? How do you think that would have gone? Marquee Company’s like Sears, Lehman, Radio Shack which were on the index for 50+ years went bust. Bear in mind, that when an investor looses 10% he/she needs 11.2% to break-even, 25% loss needs 33% to break-even and so on.

Second, it is very very important in the present world of QE, to understand what exactly is a Dollar. Only then can one understand the true value of the $51 million Mr Buffett is talking about. For millennia, real money was backed by tangible goods. Gold and Silver served this purpose. We know from history that President Roosevelt in 1933 and President Nixon in 1971 obliterated the US$ from being honest money. So what exactly is a Dollar backed by? Government bonds. Which is nothing but a promise to pay dollars. A promise on a promise and nothing tangible. Does “I promise to pay the bearer a sum of Rupees…” ring a bell? (And the central bankers call Crypto currencies as a scam!! )

What is a Dollar then? The US Congress describes the Dollar as 1/44.22 an ounce of Gold. That is if you pay $44.22 you can get an ounce or 28.35 gms of gold OR 1kg of gold for $1,560!!  Compare that to actual value of 1kg of gold as on date – $ 42,346!!

Now, why don’t someone try taking these fiat dollars to the Treasury or the Fed and try to exchange it for 1kg gold per $1,560? After all these notes are the obligations of the United States of America. You would probably be dispossessed of your money and sent to a mental institution. The dollar had such value once upon a time. Today it has lost somewhere between 85% to 97% of it’s value  – don’t take my word, pull out the data from Federal Reserve and see for yourself. (From the St Louis Federal Reserve, Title: Board of Governors Monetary Base, Not Adjusted for Changes in Reserve Requirements, Series ID: BOGUMBNS, Source: Board of Governors of the Federal Reserve System, Release: H.3 Aggregate Reserves of Depository Institutions and the Monetary Base)

It is exactly this kind of dilution and dishonesty that Gold stands to protect. And it has. An ounce of gold will fetch a fine Louis Vitton or Hugo Boss suit.

Finally, here is a chart of Gold’s performance vs Berkshire Hathway since 2002.

In 2012, gold was crushing the performance of BRK by 420%. Also one can see, Gold is still delivering 70% better returns than BRK since 2002, even after a steep drop from record highs. Buffett’s BRK has completely missed the commodity boom. Hence, maybe he has a reputation guard?

Also, Berkshire has a cash reserve of over $100Bln. This reserve needs to go into something productive otherwise this poses a big problem for Buffett, especially if the dollar is going to loose value in the future.

Dr Reddy Daily Charts with Elliott Wave Labels

If you connect the lows from Feb 2013, there is a trendline running through the recent low of 2540. Hence, it makes sense to go long at current levels of 2633 with a daily closing stop below 2540 and expect the stock to scale 2905-3000.

Please bear in mind that in the longer term time frame, we are in the fifth wave. Hence, one should not get aggressive on the long side. Also fifth waves tend to be slower than 3rd wave – something options traders need to be mindful (you may not want time decay eroding your premium despite being right).

Note: If you are a pay-per-view customer, remember to save this post as pdf.

Legal Disclaimer: This post gives an idea of how a trader chooses low risk entry points for trading and hence what you see in this post is for educational purpose only. This is no solicitation to buy, sell or hold any securities. I’m not a registered investment advisor and I strongly urge you to consult one if you are going to act on the above idea. If you decide to take action on the above idea, you are agreeing that you take full responsibility for the profit or loss that you may sustain based on such decisions and agreeing to indemnify the author of the same. You may have seen me on TV suggesting successful trade ideas but remember trading is inherently risky and past performance is no guarantee of future outcome.

NOTE: This was a premium content and has been unlocked now. The trade got stopped out at 2520 on 14th May after reaching 2780 on 30th April.

Reliance Capital – Daily Charts

Legal Disclaimer: This post gives an idea of how a trader chooses low risk entry points for trading and hence what you see in this post is for educational purpose only. This is no solicitation to buy, sell or hold any securities. I’m not a registered investment advisor and I strongly urge you to consult one if you are going to act on the above idea. If you decide to take action on the above idea, you are agreeing that you take full responsibility for the profit or loss that you may sustain based on such decisions and agreeing to indemnify the author of the same. You may have seen me on TV suggesting successful trade ideas but remember trading is inherently risky and past performance is no guarantee of future outcome.

Note: This was a premium digital content and has now been unlocked as Reliance cap has reached 373

GBPINR Daily Charts with Harmonic pattern

Legal Disclaimer: This post gives an idea of how a trader chooses low risk entry points for trading and hence what you see in this post is for educational purpose only. This is no solicitation to buy, sell or hold any securities. I’m not a registered investment advisor and I strongly urge you to consult one if you are going to act on the above idea. If you decide to take action on the above idea, you are agreeing that you take full responsibility for the profit or loss that you may sustain based on such decisions and agreeing to indemnify the author of the same. You may have seen me on TV suggesting successful trade ideas but remember trading is inherently risky and past performance is no guarantee of future outcome.

Note: This was a premium post and has now been unlocked. Trade did not trigger as it did not sustain above 101.82 for an hour.

Bank Nifty – weekly charts with Elliott Wave Labels

After a close analysis of the weekly charts of Bank Nifty from an Elliott Wave perspective, we are able to label the move from the 2009 low to the 2013 high as a completed 5 wave move. The wave principle tells us that once a 5 wave move is complete, we should look for a 3 wave corrective move against previous trend. This 3 wave move is labeled as an a b c (in circle). Most often this entire corrective wave ends near the previous fourth wave. The blue dashed line on the chart is where the previous 4th wave started and this level corresponds to 7766, which is one possible ending point for this corrective move.

Bank Nifty Daily Charts with Elliott Wave labels

Now lets take a closer look at this corrective move. Drilling down to the daily charts, we are interpreting that at this juncture only Wave a and Wave b are complete and Wave c is underway. Since wave c’s are normally a five wave structure, we are interpreting the current decline to be incomplete.

If so far everything has been Greek and Latin, do not worry. What we have to do with these interpretations and wave labels is right ahead. Using the guidelines and rules of wave principle, the key point for us is that, the bounce from 9961 (Feb 4th) on the Bank Nifty is unlikely to touch 10788  as wave iv cannot overlap into wave i and is very likely to end somewhere between (10453-10756).

So what do we do with this information? Once Bank Nifty enters this price zone of 10453-10756, we look to build short positions for the bigger target of 7766 (previous wave 4) or 7200 (where circled wave A would = circled wave C)(Ideally 1/3rd at 10456, 1/3rd at 10600 and 1/3rd at 10750). One can use 10788 itself as a stop but it would be safer to use 11040 as a stop – that is if you are a futures trader. If you are an options trader, one may look to build positions in March 9000 put or the March 9500 put when the Index starts enters zone of 10450-756.

Note: All levels mentioned here are Bank Nifty spot levels and not front month or next month futures levels.

PS: Make sure you save a copy of this report as this is a pay per view report.

Legal Disclaimer: This post gives an idea of how a trader chooses low risk entry points for trading and hence what you see in this post is for educational purpose only. This is no solicitation to buy, sell or hold any securities. I’m not a registered investment advisor and I strongly urge you to consult one if you are going to act on the above idea. If you decide to take action on the above idea, you are agreeing that you take full responsibility for the profit or loss that you may sustain based on such decisions and agreeing to indemnify the author of the same. You may have seen me on TV suggesting successful trade ideas but remember trading is inherently risky and past performance is no guarantee of future outcome.

PS: This was a premium content and has now been unlocked. Trade set up invalidated on a move above 11040.