Hindalco: Triple Correction nearing to an end

Daily Chart

Hindalco and Tata Steel are one of the best performers in Nifty. However, Hindalco is now nearing to end its bull run. In the span of two years the stock surged from 70 to 270 levels which is three times and market is still positive for this stock, but it is not wise to buy at current levels.

Elliott wave/ Neo wave analysis indicates that the stock is over priced and is set to reverse in near term. Classical technical tools like channels clearly shows that prices are hovering near the resistance of the channel. By combining Wave theory and simple technical analysis one can understand the movement of the stock and plausible turning point.

As per Wave theory, the entire two year move is a channelized move, giving an indication that the structure is corrective rather than impulse. The pattern is known as triple correction pattern marked as (a-b-c-x-a-b-c-x-a-b-c). The first box is a zigzag, where wave c ends at 161.8% of wave a followed by x. Then  second correction is an irregular flat pattern, where wave b is bigger then wave a followed by x in a diametric pattern  and then the third box is a zigzag pattern, where wave b which is ongoing as of now is at 61.8% of wave a.

In short, further upmove is limited in this stock. A steep reversal is expected in near term which can drag prices lower till 240-220 levels over short term.


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