Mentorship

Option Trading using Elliott wave and Options chart

elliott wave stocks trading Nov 02, 2020

Elliott wave patterns is applicable not only on stocks or indices spot chart but can be applied directly to the options chart as well.

The below research shows classic Neo wave Diametric pattern plotted on the option chart of strike price 11700 call.

Nifty 11700 CE Option chart:

Option Trading using Elliott wave:

As shown on above chart prices formed a classic Diametric pattern that consists of 7 legs and gave a faster move on upside breaking the last falling segment in faster time. This confirmed completion of wave g at the lows and start of wave C higher. The entire fall looks to have terminated wave B at the lows of near 240 levels.

One can clearly see that technical analysis can be applied prudently on an option chart itself and one can derive targets and stoploss as well.

It is always preferred to apply the Elliott wave patterns on the underlying stock and to increase the conviction and prudent risk management the same can then be extended to the option chart of the desired strike price.

In a nutshell, Nifty 11700 Call option showed amazing Elliott wave / Neo wave pattern and followed technical analysis methods very well.

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