NEPSE: Pullback Before the Next Rally? Elliott Wave Analysis

NEPSE index nearing culmination of initial wave, target 2802.5 with stop loss at 2546.69

Signal: bullish

Current Elliott Wave count: Wave 5

• Preferred levels:
• Resistance: 2800
• Target: 2802.5
• Stop Loss: 2546.69
• Invalidation: 2546.69
• Breakout: 2799.15

The NEPSE index appears to be nearing the culmination of its initial wave within a broader 5th wave of a triangle thrust. We anticipate the index to reach the 2790-2815 level, thereby completing the first wave, which will likely be followed by a corrective pullback as the second wave. The upward momentum is expected to resume only after this correction. For the time being, the invalidation level and stop-loss can be set at 2546.69. A breakout above 2799.15 is necessary to confirm the bullish trend. It's worth noting that the Nepse has already broken out of its parallel channel and downward trendline, and its ability to sustain above these levels is a positive indication of the underlying bullish sentiment. However, an alternative scenario suggests that the first wave may have already concluded, and we might currently be in the midst of the second wave, potentially unfolding as a complex or flat correction. To gain clarity on this, it's essential to closely monitor the intraday chart.

Based on an alternative count, it's possible that we've already completed Wave 1 of a minor wave as a truncated fifth wave. If this scenario plays out, we're currently in the correction phase of Wave 2, which is unfolding as a complex W-X-Y pattern. Under this count, the recent rally would be relegated to just a wave within the (x) wave, suggesting that we may resume our downward trajectory towards the 2400-2300 area to complete the correction. However, if the NEPSE index breaks above 2969.50, this alternative count will be invalidated, at least for the time being.