NEPSE Elliott Wave: Wave 2 of 5 Corrective Pattern

NEPSE forms a 2nd wave correction, targeting 2650-2625 support zone

Signal: bullish

Current Elliott Wave count: Wave 2nd of 5th

• Preferred levels:
• Support: 2650-2625
• Resistance: 2800
• Stop Loss: 2546.69
• Invalidation: 2469.37
• Breakout: 2799

The recent decline in NEPSE appears to be a second-wave correction, which may lead to a retracement towards the 50-61.8% area, specifically 2650-2625. This zone is expected to find support from a trendline that previously acted as a downward resistance trendline, as well as a parallel channel. Both of these technical levels may provide a cushion for the second wave. A stop-loss can be placed below 2546.69, and the ultimate invalidation level for the triangle pattern is 2469.37. To confirm the third or fifth wave, we need to see a breakout above 2799.15, which would also result in a new higher high and higher low, thereby validating the classical Dow theory's bullish market outlook.

On the intraday chart, it appears that the market is forming a complex correction for the second wave, with a possible W-X-Y pattern. If it breaks above 2747.23, this count will be invalidated. We will then need to assess whether the market will proceed with the third wave or instead form a flat correction in the near future.