Making Fibonacci projections

Making Fibonacci projections - Zig-Zags

Published: Thu, 07/18/19

The Truth About The Markets

Last week I wrote about Yes bank and made projections using Fibonacci. But in this case the calculation for a deep Zig-Zag would not work on the EW calculator, you will end up with a negative number. The way to resolve this is use the reverse the calculation %X/A instead of %A/X. I will try to do an if then inside the calculator and share it again. In the mean time here is my reply on Yes bank and also a post on Tata Elxsi sent out yesterday using the same tool.

The calculations can be done in two ways. First thing is that all Fibonacci is ideally done in percentile. So wave A moved from 404 to 285
This is a 64% decline or 36% of the top. Using 64% wave C=A at 104 is easy. Now 161.8% of 64% is = 103% or negative.
During an up trend we do not face this issue, however in a downtrend we do. Now if I take the reverse ratios of the move. 404/147 = 2.74 times up move, or 174% [2.74-1=1.74=174%]
1.74*1.618=2.815, or 281% or 2.81+1 = 3.81 times
So if wave B topped at 285 then wave C at 161.8% is = 285/3.81 = 75

TATA ELXSI

Yesterday while discussing a query on Yes Bank I realised that the EW calculator I made years ago was meant for flats in a normal small range market or bull market. If the fall is zig-zag in a bear market the numbers go negative simply because of the way you use the ratio. Now if I am using it I know the nuances and I do a lot of approx calculations on Metastock using the Fib tool itself.

[What I will need to do is update the calculator and send it out again. Change to make the ratio x/a v/s a/x in a bull/bear market scenario and with an if/then function chose if x>a or x<a for different formula, ignore if too technical for you]

Here is a changed sheet I used to work on Tata Elxsi where it is in a steep decline and I want projections for wave 3 at 161.8% of 1 without going negative.

Flats	X	A	%	B - 0.618	B - 0.50
	1010	822	1.23	938	916

Zig-Zag	B	C - 0.618	C - 1.0	C - 1.382	C - 1.618
	929	1060	756	706	678

Exp Flat	B - 1.382	B - 1.236	C= 0.618 < A
	1082	1054
C - 1.618	790	770	720

Now let us look at the chart of the stock with the markings from the above. Wave 3 of C goes to 756 but an extended third wave as is normal would go to 678. Wave C itself goes to 560. All this is based on where I mark A and B. A is the low after a triangle because triangles are wave iv and so wave v ends after that.

tata elxsi

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