NSE UPL – Bullish Continuation or Trap?

Timeframe: Monthly
The monthly chart of UPL shows a strong long-term uptrend supported by Elliott Wave analysis. After bottoming near 41 in 2008, the stock completed Wave 1 at 140 and saw a deep Wave 2 correction around the 78.6% retracement level. From there, UPL entered a strong impulsive Wave 3, subdividing into smaller waves and peaking at 829.40. What followed was a prolonged sideways to down correction forming a running flat pattern for Wave 4, with a low at 429.50.

Currently, UPL has started moving higher again, suggesting the beginning of Wave 5. Price has convincingly crossed above its 20-month EMA and is now approaching the 1.618 extension level of the previous move, near 837, which could act as the next resistance. If the bullish momentum holds, the stock has the potential to break above previous highs. However, there is also an alternative view shown on the chart, a larger running flat pattern that could still play out if price fails to hold above key levels. So, while the trend is positive, a cautious approach near resistance is advisable.

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