TCS: How Far will it go? Amazing Impulse Wave pattern and EMA analysis

nifty tcs trading Oct 07, 2020

The IT index has been known to move independently than the benchmark Nifty50 index. TCS has been one of the outperformers in the IT sector which continues to give great returns to its investors.

A good moving average tends to provide support on dips during rallies and resist price on pullbacks during downtrends

Elliott wave theory is helping us to capture the medium term trends and below we have shown part of research taken from “The Financial Waves monthly update” on TCS.

TCS weekly chart (Anticipated in June 2020)

TCS weekly chart (Happened)

(Below is the extract of the research from our Monthly report)

Elliott Wave Analysis: TCS is moving in primary degree wave [5].We can clearly see that intermediate degree wave (ii) formed a three wave correction. Wave (ii) completed near the low of 1506 levels which coincided with the [2]-[4] trend line and now we are seeing the rally in the form of wave (iii). We are not ruling out the possibility of a terminal pattern within primary wave [5] but either ways the third wave in any motive wave can never be the shortest, hence from the medium term perspective we are bullish on the stock. There is enough room within the channel for price to move towards 2400 levels close to the upper channel line.

Moving averages: A good moving average tends to provide support on dips during rallies and resist price on pullbacks during downtrends. We have identified the 250 week EMA which has successfully supported rallies in the past and dips towards this average are a great buying opportunity as major lows have formed at this average. The steeper the slope of the average, the stronger is the strength of the trend and hence if we see a flat moving average, it is a period of consolidation and price can whipsaw around it. As we can see recently price dipped towards the rising 250 week EMA and bounced up from it, if similar such opportunity presents again, one can make the most of it.

In a nutshell, trend for TCS is positive and can continue to move higher towards 2400 levels as far as 1750 level remains intact on the downside. If Price dips towards the rising 250 week EMA then it could be an added buying opportunity over the long term.

Happened – Post recommending the stock prices are moving in line with our expectations. On 16th July 2020 (today’s session) it made is new 52 week’s high near 2762 levels.

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