Sunpharma has been on a steady move upwards since 1996, it has taken 17 years to complete the entire wave movement from 1 till 3. Wave 3 was an extended wave which ended just above the 300% mark of wave 1.
Wave 3 ended at 581 level slightly above the 300% mark
Since wave 2 was very brief we can expect wave 4 to be for a slightly elongated period, atleast more than the wave 2 formation timelines. Also first level of support in weekly chart is around 465 levels and breaking that the final support is at around 385 levels. Sunpharma should hold on to it and move back to march its journey to complete wave 5
I have computed the wave 5 movement assuming that wave 4 will end around 385 levels, we can see that post a correction Sunpharma may move to 610 to 620 levels in a year's time or so
Short Sunpharma futures keeping in mind a 2 to 3 month timeline and keep SL at previously made high of 581. Aim for a target of 465 and then if it falls further next levels support is around 385
Once you see those levels wind your shorts and go long until 600 levels
I have outlined analysis primarily keeping in mind Elliott wave movements and then mapping with other technical indicators
Weekly Chart
Chart below gives a complete picture of the overall wave movements that has occurred in the past and with that we can say Sunpharma is due for a correction
Uusally if the wave 2 retraces by 23.6% or 38.2% then more or less we can expect an extended 3rd wave of 300% and that is exactly what happened with Sunpharma as well. Below chart shows the wave 2 retracement
Wave 3 ended at 581 level slightly above the 300% mark
Since wave 2 was very brief we can expect wave 4 to be for a slightly elongated period, atleast more than the wave 2 formation timelines. Also first level of support in weekly chart is around 465 levels and breaking that the final support is at around 385 levels. Sunpharma should hold on to it and move back to march its journey to complete wave 5
I have computed the wave 5 movement assuming that wave 4 will end around 385 levels, we can see that post a correction Sunpharma may move to 610 to 620 levels in a year's time or so
Usually market reacts to the fibonacci numbers appropriately, esp. to mention about the number 89. We can see from weekly charts that Sunpharma has touched the fibonacci number line of 89. This indicates that the stock will see some adverse movement. Now comparing with the following information with our Elliott wave analysis we can say that the adverse action will be definitely seen on the downside to complete wave 4 correction
Monthly chart shows the time it may take to complete the wave correction and march its juorney toward 5th wave
Other indicators like stochastics and ATR also point a correction. ATR is at an all time high and may correct basis price movement. Likewise Stochastics has shown negative divergence and is in over bought zone which indicate that a downward movement is due any time
Gann fan helps us to find the support and resistance levels
Summary
Short Sunpharma futures keeping in mind a 2 to 3 month timeline and keep SL at previously made high of 581. Aim for a target of 465 and then if it falls further next levels support is around 385
Once you see those levels wind your shorts and go long until 600 levels
If you have any questions on any of the stocks you hold and want to know a near/long term perspective then please do write to me at researchstockmarket@gmail.com. Will get back to you as soon as I can
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