TATASTEEL: Running Flat Pattern and Wolf Wave Insights

Timeframe: 30 min

NSE TATASTEEL has fallen by more than 19% in just seven weeks. The stock has broken below the 20, 50, and 100 EMA but is currently finding support at the 200 EMA on the daily timeframe chart. The ADX has risen to 38.59, while the ATR has increased to 4.77 on the daily timeframe.

For a clearer perspective, let’s shift to a 30-minute timeframe chart. NSE TATASTEEL has formed a running flat pattern with a 3-3-5 wave structure. In this pattern, Corrective Wave B exceeds the starting point of Wave A but does not close below the end of Wave A. Additionally, Wave B retraced between 100% and 138.2% of Wave A. Traders can also see the formation of a wolf wave pattern that has occurred in its final wave 5.

The price is encountering resistance at the crucial range of 154 – 155. If the security fails to break above this supply level, it may struggle to reach new highs. However, if it surpasses this level, traders could set their targets up to 160, as Wave 4 is likely to exert supply pressure. A successful breakout above Wave 4 would signal the potential for new highs, and targets can be extended further. Traders can trade for the following targets: 162 – 168 – 177+. A failure to break above this level will likely lead the price to fall towards the demand zone of 140.

Only premium subscribers will get trade setup with entry, exit, and invalidation levels.

Running Flat Formation
1. Structure:

• Wave A: Initial corrective wave.
• Wave B: Corrective wave that exceeds the starting point of Wave A.
• Wave C: Final wave, typically in a five-wave structure, that does not close below the end of Wave A.

2. Characteristics:

• Wave B: Moves beyond the start of Wave A.
• Wave C: Consists of five waves and does not close below the end of Wave A.
• Wave A: Consists of three wave, weak structure
• Wave C has a five-wave structure.

3. Guidelines:

• Wave B: Retraces between 100% and 138.2% of Wave A.
• Wave C: Usually matches or is slightly less than the length of Wave A.
• Volume: Typically decreases during Wave B and may slightly increase during Wave C.

Wolf Wave

1. Structure:

• Wave 1: The initial move that sets up the pattern.
• Wave 2: A correction that retraces part of Wave 1.
• Wave 3: A strong move that extends beyond the end of Wave 1.
• Wave 4: Another corrective wave that retraces part of Wave 3.
• Wave 5: A final move that surpasses the end of Wave 3.

2. Characteristics:

• Formation: The pattern resembles a “wolf’s head,” with five waves creating distinct peaks and troughs.
• Wave 3: Often the longest wave, extending beyond the length of Wave 1.
• Wave 5: Typically exceeds the end of Wave 3, marking a new high or low.

3. Guidelines:

• Trendline: Connect the peaks and troughs of Waves 1, 2, 4, and 5 with trendlines. The intersection of these lines often signals the breakout point.
• Volume: Volume may drop during the corrective waves and rise when Wave 5 breaks out.
• Breakout: The pattern confirms when the price moves beyond the end of Wave 5, suggesting a potential trend reversal or continuation.