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| Figure 1 |
Eternal
Limited (NSE: ETERNAL),
formerly known as Zomato, has grown from a food-delivery company into a leading
consumer technology company in India. Its business now includes Blinkit, Hyperpure, and District,
creating a strong multi-business platform.
The
company has recorded impressive growth, with revenue rising 169% year-on-year to ₹54,364 crore
and its market capitalisation crossing ₹3,00,000
crore. This strong growth and high trading liquidity have also
made Eternal a popular stock among institutional investors.
With
the fundamental picture looking strong, we can now turn our attention to the price chart. By studying
the stock's price movement through Elliott
Wave analysis, we can try to identify its current wave
structure and understand where its next
major move could take the stock.
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| Figure 2 |
On the monthly chart of Eternal Limited, the larger Elliott Wave structure appears to show a clear impulsive advance, with Wave 3 and Wave 4 seemingly completed, followed by a strong rally that could represent Wave 5. If Wave 5 has indeed been completed, the entire five-wave impulsive sequence would be finished, and the subsequent price action should be interpreted as part of a larger corrective phase.
However, at this stage, we should not assume that Wave 5 is conclusively complete. The price structure that has developed after Wave 4 does not yet provide a sufficiently clear Elliott Wave signature to confirm the termination of the fifth wave. In particular, the internal structure of the advance following Wave 4 needs to be examined in greater detail to determine whether it represents a completed five-wave impulse or whether the stock is still unfolding another subdivision within Wave 5.
Therefore, rather than labeling
the current decline as a confirmed correction immediately, the next step is to
drill down into the lower time frames and analyse the internal wave structure
of the move from the Wave 4 low. This detailed analysis should help us determine
whether Wave 5 has genuinely terminated or whether the larger impulsive
structure still has more development left.
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| Figure 3 |
The structure on the weekly chart suggests that Wave 5 may still be unfolding rather than being completed. The price action following Wave 4 appears to be developing as an Ending Diagonal, with the internal waves A, B, C, and D already in place. However, there is still some uncertainty about whether the final E-wave has been completed. The current structure does not yet provide enough evidence to confidently label Wave 5 as finished.
Therefore, the next step is to move to a lower time frame and closely examine the internal structure of the E-wave to determine whether it has completed or still requires further development. This lower-degree analysis should help us establish whether the Ending Diagonal—and consequently the larger Wave 5—is truly complete.
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| Figure 4 |
Moving down to the 4-hour chart, the E-leg appears to be unfolding as a three-wave A-B-C structure, as expected within an Ending Diagonal. Wave C itself appears to have developed into a five-wave impulse, labelled 1-2-3-4-5, suggesting that C—and potentially the entire E-leg—may have reached completion.
If this interpretation is correct, the Ending Diagonal and the larger Wave 5 would also be complete, opening the possibility of a corrective move to the downside. However, the green volume bars are an important observation that prevents us from reaching that conclusion too quickly. The presence of buying volume suggests that the stock may undergo only a short correction before attempting another upward move.
This observation prompted us to investigate the structure further. The
current A-B-C pattern could therefore represent either the completed E-leg or a
larger Wave A, with the present decline forming only an internal component. In
the latter case, a Wave B recovery followed by Wave C would still be required.
Therefore, we need to examine the subsequent price structure more closely to
determine which Elliott Wave interpretation is developing.
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| Figure 5 |
The current structure presents two possible Elliott Wave interpretations. The completed A-B-C pattern may represent the three internal waves of a larger Wave A. If this count is correct, the next move should develop as a three-wave Wave B correction to the downside, followed by a five-wave impulsive Wave C advance, completing the larger corrective structure.
This interpretation is further supported by the bearish divergence visible on the RSI, suggesting that the current upward momentum may be losing strength and that a corrective phase could develop.
Alternatively, the A-B-C structure could represent the completed E-wave of the Ending Diagonal. At this stage, we should keep both counts open and allow the subsequent price structure to determine which one is developing. As Elliott Wave analysts, our focus is not on predicting the outcome prematurely, but on observing how the market unfolds and identifying the structure that ultimately confirms itself.
Disclaimer: The information and Elliott Wave analysis
presented in this article are intended solely for educational and informational
purposes. They represent the author's interpretation of market price action and
should not be considered as investment, financial, or trading advice. The
author is not a SEBI-registered Investment Adviser or Research Analyst. Readers
should conduct their own research and consult a SEBI-registered financial
professional before making any investment decisions. Investing in the stock
market involves risk, and past performance does not guarantee future results.