The daily chart of Asian Paints reveals a counter-trend rally within an impulsive Elliott Wave pattern. The stock has completed its orange wave 4 correction and has moved into orange wave 5, situated within the broader navy blue wave 3 formation. This indicates the final leg of an upward movement forming part of a larger corrective sequence.

Orange wave 5 is typically the final part of the impulse wave and is marked by a final price surge before potential reversal. The end of wave 4 has set up this final move, which may show strong or weakening momentum based on market conditions. Current price action suggests that the rally may be nearing completion as the five-wave structure wraps up.

Next, navy blue wave 4 is expected to develop following the conclusion of orange wave 5. This wave should be corrective and might provide a pullback once the ongoing upward phase finishes. The daily timeframe offers a clear look into this setup, indicating the rally may be in its later stages as part of the broader counter-trend movement.

Traders should closely watch orange wave 5 for signs of exhaustion or reversal. Classic termination signals include divergences in momentum indicators or distinct reversal patterns. Given the context of this wave within a larger correction, this may represent the last opportunity to manage or exit counter-trend trades.

The analysis advises preparing for a possible trend shift as orange wave 5 nears completion. However, wave extensions may delay the reversal, so it's critical to confirm with price action and technical tools. Upcoming sessions are expected to provide valuable signals about whether the counter-trend rally is ending and a new corrective phase is beginning.

Asian Paints Elliott Wave technical analysis

Function: Counter Trend.

Mode: Impulsive.

Structure: Navy Blue Wave 3.

Position: Gray Wave C.

Direction next higher degrees: Navy Blue Wave 4.

Details: Navy blue wave 2 appears completed; navy blue wave 3 is currently in play.

The weekly chart of Asian Paints displays a counter-trend rally progressing through an impulsive Elliott Wave formation. The stock has completed navy blue wave 2 correction and moved into navy blue wave 3, positioned within the larger gray wave C structure. This reflects a strong upward move forming part of a broader corrective trend seen on higher timeframes.

Navy blue wave 3 typically marks the strongest leg in an Elliott Wave sequence. It is often characterized by high momentum and extended price action. With wave 2 completed, this third wave is now active, suggesting an aggressive move that may surpass the length of wave 1. The current market setup indicates that the rally has more room to run before transitioning into the next corrective phase.

Looking ahead, navy blue wave 4 is expected to follow the completion of wave 3. This next wave should be corrective and may offer a pullback opportunity before the rally continues. The weekly timeframe gives a solid view of the intermediate-term trend, indicating the stock is in a key phase within a broader corrective pattern.

Traders should observe wave 3 for typical impulsive traits like strong momentum and consistent price growth. Given that this wave sits within a counter-trend structure, it may drive the stock higher before topping out. Volume patterns and technical indicators will be essential in confirming wave strength and signaling potential turning points.

The analysis points to potential extended gains during this navy blue wave 3 phase before a possible pause in wave 4. Watching for price action clues and Fibonacci relationships can help identify when this shift might occur. Overall, while part of a corrective sequence, the current structure presents a meaningful rally phase. Careful monitoring can reveal optimal trading levels and early signs of a reversal.

Asian Paints Elliott Wave technical analysis [Video]

Author

Peter Mathers

TradingLounge

Peter Mathers started actively trading in 1982. He began his career at Hoei and Shoin, a Japanese futures trading company.

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