The document discusses Elliot Wave Theory and how it can be used to predict stock market trends and prices. It states that Elliot Wave Theory is based on repeating 8-wave cycles made up of shorter cycles that follow a rhythmic pattern. These patterns can be used to predict future stock prices and market trends, as waves show upward trends when investor sentiment is positive and downward trends when sentiment becomes too positive. The document provides examples of how Elliot Wave Theory appeared to predict movements in the rupee/dollar exchange rate and prices of SBI stock.

1. Stock Predictions based on
Elliot Wave Theory

2. Elliot Wave Theory : What does it mean ?
The Elliot Wave Principle is based on a repeating 8-wave cycle,
and each cycle is made up of similar shorter-term cycles
These waves have a rhythmic pattern and these patterns can be
used to predict future prices of stocks and predict trends of the
market.
These waves move with investor psychology i.e. waves show an
upward trend when crowd is positive and too much positivity leads
to a downward trend in the wave.
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3. Elliot Wave Theory : What does it mean ?
This is the pictorial representation of the Elliot Wave Theory. 1, 3, and 5
are impulses, and waves 2 and 4 are smaller retraces of waves 1 and
3. Corrective waves subdivide into 3 smaller-degree waves;5-A,A-B and
B-C. Please see that any move can be seen as one complete Elliot Wave
Cycle.
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4. Elliot wave Theory and Stock Correlation
We hold stocks in this
phase
We sell stocks in this
phase
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5. What we do ???
 Identification of Stocks that may follow the Elliot Wave Theory
 Invest the money in those stocks when the upward trend of these
stocks start
 Booking of Profit when the downward trend in those stocks start.
 The upward and downward trend of these stocks are estimated on
the base of the stock charts ,total market capitalization of the stock
and the general public interest for that particular stock.
 Software used to estimate these breakpoints is Metastock and other
factors taken into account are fibonacci and moving averages.
 Two examples where there theory appears to be working are shown
in the following slides.
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6. Rupee to Dollar Curve
From April 2008 to April 2010 , the INR/dollar value moved
from 39 to 52 and came back to stabilize around 46 level. As
we can see the pattern exactly follows the wave pattern
described by Elliot Wave Theory.
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7. SBI’s price prediction
SBI completed one complete wave between the two encircled points. It went from 1000 to
3500 levels based on the upward trend of the Elliot wave theory. Now SBI appears to
have completed a 3 wave correction pattern and came down to 1900 levels to complete
the correction. It may begin new uptrend very soon according to Elliot Wave theory. If it
would have gone beyond 1500 levels this theory would not have complied on this stock.
But the pattern worked and we see an upward trend in SBI again and it seems that this
stock is one of options to invest money and book profit.
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8. Reasons why Indian Stock Market should do well …
 Only 8% of Indians invest in stocks and for any country to reach the pinnacle in terms of
development, the companies need to grow and for that more and more people (apart from the
company themselves) need to invest which would result in more cash intake for the stock market and
which could pump the stock market growth from strength to strength.
 In the last 6 years the market has gone up to 21000 level once and again stabalised to about 16000
levels where as our GDP growth is in double digits each year.So this means that the stock market
still needs to correct itself based on the differnence in GDP growth and inflation which is roughly
around 23000 to 24000 level and if it is to happen the bull trend can be predicted pretty soon for the
Indian Stock Market.
 Gold and real estate are really over priced at this point in time and people are starting to look for
other options to invest which appears to be stocks and with increase in literacy rate of the country the
stock options are becoming more and more prospective for the upcoming investors.
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9. Do You Have
Any Questions?
For further assistance:
Gaurav Verma
21G Investments
http://www.facebook.com/pages/21G-
Investments/353301421363897
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10. Disclaimer:
 The slides are for educational purpose only and these are my
personal views which can be right or wrong. The predictions are
75 -80% correct and it involves lot of patience to mint money
through these predictions.
 Not all stocks follow patterns of Elliot Wave Theory.
Copyright © 2012 21G Investments. All rights reserved.