PIIND : at Interesting Risk and Reward1. Key Analysis and Levels
Wave 4 (Primary) Zone (₹3981-₹4295):
The price is currently in the Wave 4 corrective zone, as per Elliott Wave Theory.
This zone is critical for determining whether the upward trend will resume ( Wave 5 ) or break down further.
Wave C (Minor) Completion Zone:
Represents the lower boundary of the current corrective structure.
A bullish reversal is possible here if demand sustains.
Target at Wave 5 (₹4922-₹5041):
If the upward trend resumes, this is the extended retracement of Wave 3, and the logical profit zone for bulls.
Stop Loss Level (₹3980):
Positioned just below the Wave 4 corrective zone to manage downside risk.
2. Trade Setup
A. Long Trade Setup:
Why Long?
The price is at a critical support area within Wave 4, where buyers might step in.
Potential for continuation of the uptrend to form Wave 5.
Entry: Between ₹4000-₹4100, after observing bullish reversal signals (e.g., bullish candlesticks, volume surge).
Stop Loss: ₹3980, slightly below the Wave C completion zone.
Targets:
₹4700: Intermediate target at prior swing resistance.
₹4922-₹5041: Final target at Wave 5 extension.
B. Short Trade Setup (If Support Fails):
Why Short?
A breakdown below ₹3980 would invalidate the Wave 4 support zone, signaling further downside.
Bearish continuation could lead to lower Fibonacci levels or prior demand zones.
Entry: Below ₹3980 after confirmation of breakdown with volume.
Targets:
₹3700: Immediate support level.
₹3250-₹3300: Major demand zone from previous Wave 2.
Stop Loss: ₹4080 to limit risk on false breakdowns.
3. Explanation of Analysis
Wave 4 Correction:
Wave 4 is typically a corrective phase after a strong Wave 3 impulse. It often tests Fibonacci retracement zones ( ₹3981-₹4295 ).
Wave 5 Target:
If the uptrend resumes, Wave 5 is expected to extend to 113%-127% of Wave 3’s range ( ₹4922-₹5041 ).
Bearish Scenario:
Failure to hold Wave 4 corrective support would signal deeper correction, potentially targeting previous Wave 2 levels.
4. Confirmation Signals
For Long Entry:
Price stability within ₹3981-₹4295 and bullish reversal patterns like hammer candles or bullish divergence (e.g., RSI).
Break above ₹4300 confirms Wave 4 completion.
For Short Entry:
Decisive breakdown below ₹3980 with strong bearish momentum (e.g., large red candle, volume spike).
5. Risk Management
Risk limited to 1-2% of trading capital per trade.
Use partial profit booking at intermediate targets (e.g., ₹4700) and move stop-loss to breakeven.
Why This Plan Works
This strategy leverages Elliott Wave Theory to anticipate high-probability reversal or continuation scenarios. It accounts for both bullish and bearish outcomes, ensuring a structured approach to risk and reward. The key levels and confirmation signals allow for timely and informed decision-making.
