Putting Elliott Wave Theory to the Test

When I found out about Elliott Wave Theory, I couldn't wait to put it to test and find out whether the theory actually holds good in practice or not. To put things in perspective, Elliott Wave Theory derives its argument from the concept of Mass Psychology, i.e. the general tendency of people to behave in a general way in the long run. For example say when we eat something spicy, the general tendency is to drink a lot of water while only a few probably go for a glass of juice or beer or something else.
The Elliott Wave Theory proposes that market prices unfold in specific patterns, which practitioners today call Elliott waves. The wave principle posits that collective investor psychology (or crowd psychology) moves from optimism to pessimism and back again. These swings create patterns, as evidenced in the price movements of a market at every degree of trend. (Source: Wikipedia)
To put the theory to test, I have picked the BSE 30 stocks and marked the Elliott Waves for each of their stock prices. Based on this, each of the stock prices should reach a certain bracket within the next 3 months. Whether it actually happens or not will tell us based on a probability study whether the principle holds good or not. The graph below for GMR explains the concept.

As per the Wave Theory, the next wave should be that of an upward trend or the "motive" wave. Based on this GMR should reach a price between Rs 95 and Rs 105 within the next 3 months. Similar would be the analysis for the BSE 30.


Lets wait and watch whether the Wave Theory actually works or not.....