Elliott Wave Analysis of CAIRN India

I thought I’d take a quick look at the chart of CAIRN india before shutting down for the upcoming holidays. But I ended up spending a good 30 minutes trying to decipher what was going on. At long last, I have come up with my best version and here is the bottom line. A five wave sequence is probably over, and we are just in the early stages of the C wave of teh correction. Take a look at the chart for the details.


  • K P Ganesh

    The road map shown for Cairn gives a perspective of what may happen, but with options open for alternative wave counts. Would there be a possibility that wave 5 could actual be forming now in the areas that you have marked as a-b-c in a complex 3-3-3-3-3 pattern ensuring an ending closer to the price target of 377 (summation series number).

  • K P Ganesh

    Sir, but from today’s price move, in keeping with the positive news development on Vedanta been given the green signal by SEBI to acquire CAIRN, CAIRN seems to be in a 5 wave up move from the low of 306 made on Feb 10,2011. Currently we have declined 50% of wave 3 from 313.95 low made on Feb17,2011 to the intraday high of 359 on Mar08,2011. Clearly looks like the last leg i.e wave 5 is pending, which, if taken as per Wave theory guidelines of Wave A=Wave C, gives us a target of 363.15. At times we have seen Wave C extending as much as 1.618 times Wave A. So an alternate higher target of 379.25 emerges. So in my opinion in the very short term, maybe by this Friday (18/03/2011) we could be closing at or near 377.

    • Ganesh, Either we are in a correction, or in an impulse mode. If we are in a correction, an investor should wait for the correction to finish before he/she gets long on the stock. What you are saying is Wave c of the B wave is not over. Perhaps you are right. But it doesn’t change the outlook that we will eventually get a decline down to blue line. If we trade below 330 anytime, the odds increase for a direct move down.

  • vidhan dugar

    Sebi has not given green signal for the sale of CAIRN as on date.Please check http://www.sebi.gov.in.

  • K P Ganesh

    Mr. Ramki, I wish to thank as well as respond to Vidhan Dugar’s comments.

    At the time of my posting my comment on CAIRN, highlighting possible short term price target, NDTV Profit was airing the News flash of SEBI having given green signal to the Vedanta-CAIRN deal. The same appeared in Indian Express for which the link is here. http://www.indianexpress.com/news/sebi-retracts-says-cairn-deal-not-okayed/762250/. I’m enclosing an excerpt of SEBI’s initial action which is highlighted in the Indian Express.

    “Sebi’s official website this afternoon showed that the regulator has cleared Vedanta group’s Rs 13,610 crore open offer for acquiring 20 per cent stake in Cairn India. But soon after, the market regulator corrected the information, saying that the issue was still under process. ”

    Either ways, this news is inconsequential from Wave theory perspective. Actually it gives a perfect example of how ineffective news can be, to those who rely on news to make their trading decisions as well as highlighting how financial media would have been found wanting when such opposing news appear the same day, in spite of which price continues to move in the trend of larger degree albeit some volatility due to the news.

  • vidhan dugar

    People following technical analysis should focus on technicals and not on positive news developments to support their view.Has the view changed after we know there was no new development ?

    • Hi Vidhan, while what you say has an element of truth, one should also not be blind to developing conditions in the marketplace. This is especially true with wave analysis. A ‘C” wave can continue to be a ‘C’ wave, but a fresh piece of news can make the analyst decide that instead of an originally planned ‘Sell’ at an equality measure to wave’A’, it might be more appropriate to wait for either a 1.382XA or 1.618XA projection. From this point of view, I would urge traders to have an open mind about the markets. This is the right way to enter the market with low risk. Regards

  • Gautam Bajaj

    Hello Ramki,

    I agree with your views here.

    I have an initial target for C at 290-270

    Here is my post on Cairn – March 11th.


    Do take time off to visit my blog. I use wolfe wave’s to trade.

    I do also follow EW.


  • vidhan

    Rally in Cairn completed @ 375 levels (377-379 ..also suggested by Mr Ganesh .) Target 265…………..

  • vidhan dugar

    Dear Ramki,

    Cairn India(cmp 332) appears to be on the verge of cracking…. a close below 330 levels and ….

  • sunny

    sir .cud u plzz luk at charts of asian paints and titan ……..they both have been darling of indian stock market.


  • vidhan dugar

    cairn made a low of 280 in eq segment , although it made a low of 252 in futures ….

    • Hi Vidhan, I count you as one of those “Genuine” traders who live and breathe the markets! How else can I explain that you are keeping track of what I wrote so many months back…..

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