Maharashtra Seamless - Can we identify the Bottom?

Established in 1988, Maharashtra Seamless Ltd specializes in the production of seamless pipes and tubes, as well as ERW pipes. The company is also engaged in renewable energy generation and rig operations. Over the past five years, it has achieved a commendable profit growth rate of 26.3% CAGR and maintains a positive free cash flow.

The stock's price-to-earnings (PE) ratio stands at 10, significantly lower than the industry average PE of 27.5.

In terms of technical analysis, particularly through the lens of Elliott Wave theory, it appears that the stock has completed its 4th wave.

For a detailed explanation on Elliot waves basics, please refer to the following link:https://www.investopedia.com/terms/e/elliottwavetheory.asp

Upon reviewing the fourth wave position depicted in the provided link, it seems that Maharashtra Seamless is currently situated in that phase. The conclusion is drawn from the following clues related to the general rules of wave 4 & technical analysis:

1) Typically, wave 4 retraces wave 2 by 23% to 38%. In some instances, it may extend to 50% or even 61.8%. This extension occurs when wave 2 experiences a shallow retracement (less than 50% of wave 1) or when the minor wave 5 in the preceding impulse is extended (exceeding 100% of the length of waves 1-3). In this case, the second scenario applies, as wave 4 has retraced to the 50% level.

2)Also we can see a well defined ABC patter till wave 4 end which respects the general guidelines for Elliot wave. The wave A and wave C are almost equal

3)Major corrections often provide indications through price action or candlestick patterns. In this instance, a morning star formation is observed at the 50% Fibonacci level on the weekly timeframe, suggesting a potential reversal from these levels.

The wave counts, stop loss, and target levels are illustrated on the accompanying chart.

DISCLAIMER: It is important to note that the information provided in this analysis is intended solely for educational purposes. It is strongly advised to consult with a financial advisor prior to making any investment decisions. I cannot be held responsible for any financial losses that may occur.