The daily chart for JSW STEEL indicates a counter-trend correction forming inside a broader bullish setup. Orange wave 1 appears finished, with the stock now entering orange wave 2, which is part of the larger navy blue wave 1 uptrend. This suggests a short-term pullback before the potential continuation of the dominant upward move.

Wave 2 usually retraces 38% to 61% of wave 1, often manifesting as classic patterns like zigzags or flats. Since wave 1 presented a strong bullish impulse, this retracement is expected to feature overlapping price movement and slower momentum—both characteristics of corrective behavior. On the daily timeframe, this reflects a temporary consolidation within the overall upward structure.

After wave 2 completes, the next anticipated move is orange wave 3 upward. This wave is typically the most powerful segment, potentially moving past the high of wave 1. The key invalidation point to monitor is 906—if the price closes below this, the current bullish wave structure becomes invalid.

Traders should keep watch for signs of wave 2 ending, including bullish candlestick patterns and momentum signals indicating oversold conditions. This correction phase could present ideal entry points ahead of the projected wave 3 advance. Utilizing technical tools will be important to confirm the shift to a new upward impulse.

This phase is a standard pause within the larger bullish trend, offering a window to evaluate and plan positions. Monitoring key Fibonacci retracement zones will be essential to time entries as the trend transitions from wave 2 to wave 3.

JSW STEEL Elliott Wave technical analysis

Function: Bullish Trend.

Mode: Impulsive.

Structure: Navy Blue Wave 1.

Position: Gray Wave 3.

Direction next lower degrees: Navy Blue Wave 2.

Details: Gray wave 2 is likely complete; navy blue wave 1 within gray wave 3 is developing.

Wave cancel/invalid level: 906.

The weekly chart for JSW STEEL indicates the formation of a bullish trend through an impulsive Elliott Wave structure. After completing gray wave 2, the stock has moved into navy blue wave 1, which forms part of the larger gray wave 3 pattern. This signals the early stage of a new upward phase, potentially leading to strong momentum in the coming weeks.

Wave 1 typically shows the initial movement in a new trend, characterized by gradually increasing confidence and momentum. Though not the most explosive part of the sequence, this phase sets the foundation for further gains. The current pattern suggests that price may advance steadily before the next corrective wave develops.

From a weekly chart perspective, this setup marks the beginning of what could become a significant upward trend. With gray wave 3 underway, stronger bullish impulses may follow. The invalidation level at 906 is a key support—if breached, it would call for reassessment of the wave structure.

Traders should observe wave 1’s progress for signs like rising volume and consistent upward price movement. While this wave might build momentum gradually, it offers opportunities for early positioning. Confirmation from indicators and price behavior will be important as the pattern develops.

The next move to anticipate is navy blue wave 2, which will likely follow after wave 1 ends. This expected correction can provide a short-term pullback before a potentially powerful wave 3 advance. The weekly view emphasizes the importance of this phase for establishing medium-term positions.

Technical analyst: Malik Awais.

JSW STEEL 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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