Invest with Ajit
Welcome to Invest with Ajit! Dive into the world of smart investing with insights on equity, debentures, mutual funds, and more. We cover technical and fundamental analysis, behavioral insights, government policies, and updates on Nepal Rastra Bank rules to help you make informed financial decisions for your Pathway to Financial Freedom.
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Invest with Ajit
Warning: 'For the Finance Sector Greater risk. Act cautiously." For Long term perspective
Note: "For the long-term investor only, the trader can purchase at any price and should follow the strict guidelines of trading Psychology so it is assumed that you have a strict stop loss."
The monthly chart of the finance sector tracks long-term price trends, showing key market movements, trends, and cycles. It's crucial for identifying broader patterns and potential market turning points.
Elliott Wave Analysis:
Wave 1 (247 to 900): The rally from 247 in May 2013 to 900 by July 2016 fits the profile of Wave 1, an initial impulse wave.
Wave 2 (900 to 560): The drop from 900 to 560 by December 2019 could represent Wave 2, a corrective wave.
Wave 3 (560 to 3290): The strong rally from 560 in December 2019 to 3290 by August 2021 seems like Wave 3, which is often the strongest and most extended wave in the Elliott Wave structure.
Wave 4 (3290 to 1560): The decline from 3290 to 1560 by October 2023 looks like a Wave 4 correction.
Wave 5 (1560 to 4090): The rally from 1560 in October 2023 to 4090 in September 2024 is likely Wave 5, marking the end of the five-wave impulse structure.
Note: "All data are not exact but approximate"
The 5th wave in Elliott Wave Theory is the final wave in a five-wave motive sequence, typically representing the last push in the direction of the larger trend. Here are the key characteristics of the 5th wave:
Trend Continuation: It confirms the trend set by the first wave, often driven by positive sentiment and increasing participation.
Momentum Loss: Despite the trend, the 5th wave may show signs of momentum loss compared to the 3rd wave, especially in terms of strength and speed.
Divergences: Indicators like the RSI or MACD might show divergence during this wave, signaling a weakening trend and potential reversal. (MADC has not confirmed the divergence).
Volume Decline: The volume in the 5th wave may decline, as some participants may already be exiting the market, anticipating a correction.
Psychology: The 5th wave is often characterized by optimism, where many investors believe the trend will continue indefinitely, though it typically sets the stage for a corrective phase (ABC correction).
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