Wave-3 Setup Emerging After Deep Correction in a High-Quality Industrial Compounder

Elliott Wave Structure (Primary Degree) The strong rally into mid-2024 marks a completed Wave (1). The sharp and extended decline that followed fits a Wave (2) correction, retracing a large portion of the prior impulse and shaking out weak hands. Price has now formed a base above structural support, and the initial upward thrust signals the early stage of Wave (3). The projected roadmap on the chart outlines a classic 1-2-3-4-5 impulse, with Wave (3) expected to be strong and vertical once momentum expands. 📐 If Wave (3) unfolds as expected, the structure allows for significant upside expansion over the medium to long term, with higher highs following brief consolidations. 2. MACD Structure & Momentum Shift During the late stages of the correction, price made lower lows while MACD failed to do so, indicating bullish momentum divergence. MACD has started turning upward from depressed levels, hinting at trend exhaustion on the downside and early bullish momentum rebuild. This behavior is typical at the end of Wave (2) and before a strong impulsive move. 3. AVWAP as Structural Support Anchoring AVWAP from the previous major high, price found acceptance and stability around it during the basing phase. The recent move back above AVWAP suggests value re-acceptance by long-term participants. As long as price holds above the ₹1,550–1,600 zone, AVWAP acts as a reference support, keeping the bullish structure intact. 4. Fundamental Strength (Long-Term Tailwind) The company demonstrates strong ROCE, indicating efficient capital utilization. Consistent revenue and profit growth across cycles reflect business durability. A niche industrial positioning and execution track record make it a long-term compounder, increasing confidence in higher-timeframe technical setups. Strong fundamentals increase the probability that the next impulse leg is sustained rather than speculative.