NEPSE Elliott Wave: Complex Correction in Wave 2

NEPSE in wave 2, expecting further correction to 61.8% Fibonacci level

Signal: bullish

Current Elliott Wave count: Wave 2nd

• Preferred levels:
• Support: 2550-2625
• Resistance: 2800
• Stop Loss: 2546.69
• Breakout: 2754.08

In the NEPSE, we believe we are still in the midst of the second wave, characterized by a complex correction. Although the market has already corrected by nearly 50%, this retracement is insufficient for a second wave, historically speaking. Notably, the NEPSE has consistently reached the 61.8% Fibonacci level during similar corrections in the past. With this in mind, we anticipate further correction in the coming weeks. The market has already tested the upper trend line, which previously acted as resistance, and the parallel line, finding support. We may see the second support emerge around the 61.8% area. Examining the weekly chart, a middle band at 2754 is currently acting as the main resistance. If the weekly candle closes above this level, we can expect an upward rally to follow. From an alternative perspective, if the NEPSE breaks above 2754.08, we may see either a flat correction or the onset of the third wave within a larger fifth wave. The stop-loss remains below 2546.69, and the primary resistance zone is at 2800.

For an intraday perspective, this setup can play out in the market. We may witness an initial 1-2 day upward bounce, followed by a gradual decline towards the 61.8% Fibonacci level, where a deeper correction is likely to occur. For a more detailed analysis, refer to the 1D chart.