How to Read an EllTec Analysis Report

Level: beginner. Every EllTec Analysis report follows the same structure, from the broad picture (what the company or market delivers and how the economy around it looks) down to precise price levels. Once you know the structure, you can read any analysis in a few minutes and judge it yourself. This guide walks through every part, explains what each number means and shows it on a real example: the free analysis of the South Africa Top 40 Index. Nothing here is investment advice. The five most important points Read from the outside in: fundamentals and macro tell you whether the backdrop supports the idea, the wave count tells you where the price may go and where the idea fails. Target zones are areas, not exact prices. Plans are built across them on purpose. A probability is an estimate, not a promise. A scenario with 65 % still fails about one time in three. The most important single number is the level at which the scenario no longer holds. Not every analysis has a stop-loss or an invalidation level; where one is given, take it seriously. An analysis says nothing about how long a move takes. Long-term Elliott Wave targets can be months or years away. 1. Free and Premium: what you can read Every analysis has a free part and, for stocks, crypto and commodities, a Premium part. The free part covers fundamentals, the macro backdrop, correlations and seasonality. The Premium part starts with the technical analysis: the Elliott Wave count, the target zones, the scenarios with their probabilities, the potential trading plan and the risk assessment. Index analyses are completely free, so they are the best way to see what a full report looks like. The labels at the top of every analysis card show it: a blue Free label or an amber Premium label. PartQuestion it answersAccess Cards at the top How does the asset look at a glance: valuation, sentiment, macro, overall attractiveness? Free (Risk/Reward Score for subscribers) Fundamentals What does the company or market actually deliver, and is the price justified? Free Macro analysis Does the economy of the region support or weigh on the asset? Free Correlations What does the asset move with, and how strongly? Free Seasonality Which months were historically strong or weak? Free Technical analysis Where in its wave structure is the price, and where are the target zones? Premium (free for indices) Scenarios and probabilities What is the most likely path, what are the alternatives, and where does the idea fail? Premium (free for indices) Potential trading plan How could the idea be put into practice: entries, profit taking, risk limit? Premium (free for indices) Risk assessment What can go wrong, and how risky is the asset overall? Premium (free for indices) Older analyses sometimes order the sections slightly differently, for example seasonality after the trading plan. The content is the same. 2. The top of the page: title, dates and the cards Under the title you find the symbol (the ticker), the asset class, the date of first publication and the date of the last update. The short text below the title is the summary: it states the idea of the analysis without giving away Premium details. Always look at the update date. Fundamentals are refreshed after quarterly results, and some figures (correlations, risk figures, the DCF range, the EllTec Analysis Score) are recalculated automatically every week. Above the text sit up to four cards. Each has a button What does this mean? that explains the number in plain words. EllTec Analysis Score (stocks only, free): a weekly fundamental rating from −100 to +100. It compares 20 figures on valuation, quality, growth, stability and capital allocation with 100 companies of the same sector and with all sectors. 0 means fairly valued, positive values undervalued (green), negative values overvalued (red). Fear & Greed (stocks and indices): the EllTec Analysis Fear & Greed Index of the asset's region, from 0 (extreme fear) to 100 (extreme greed). Extreme fear often comes near lows, extreme greed near highs; it is a mood gauge, not a timing signal. Macro backdrop: the result of the rules-based macro check of the region from −100 to +100. Each economic indicator counts as a tailwind, neutral or a headwind for equities. From +20 the backdrop reads supportive, from −20 negative. Risk/Reward Score (subscribers): one number from 0 to 100 that sums up the analysis: the probability-weighted upside to the first profit target against the downside to the stop or invalidation, where the price stands relative to the entry zone, the risk score, the macro backdrop and, for stocks, the EllTec Analysis Score. It is recalculated on every visit and moves with the price. 3. Fundamentals: what is behind the price For a company this section describes the business model, the segments, the competitive position and the key figures. For an index it describes the composition and the economy behind it; for a commodity, supply and demand; for a cryptocurrency, the network and its use. The figures stand in tables. The last column (Read) gives a short judgement and is coloured from red (weak or expensive) through grey (neutral) to green (strong or cheap). That way you see in seconds where the strengths and weaknesses lie. Look in particular at: Valuation: P/E, forward P/E, price to sales, price to book, EV/EBITDA and the free cash flow yield. They show how much you pay for each unit of profit, sales or cash. Quality and growth: margins, return on equity, revenue and earnings growth, and the forward estimates of analysts. Balance sheet: debt, cash and the ability to pay interest. For most stocks a box shows a DCF range just before the conclusion: a pessimistic, a base and an optimistic fair value from a discounted cash flow model. Read it as a range of plausible values, not as a price target. The conclusion at the end of the section sums up whether the fundamentals support the technical idea or argue against it. You can model the same company yourself with the DCF calculator in the education tools. 4. Macro analysis: the economy around the asset Stocks rarely move against their economy for long. This section looks at interest rates, inflation, growth, the labour market, the currency and, where it matters, commodity prices in the asset's region. The weekly regional macro analysis on the macro dashboard goes deeper; the card at the top of the analysis gives the current result of the macro check. A strong company in a weak economy can still fall; a mediocre one in a strong economy can still rise. The macro section tells you which wind the idea sails against. 5. Correlations: what the asset moves with A correlation measures how closely two prices moved together, from +1 (always in the same direction) through 0 (no relation) to −1 (always opposite). At the end of the section a calculated table shows the correlation of weekly returns with fitting benchmarks (for example the S&P 500, the Nasdaq 100, the US dollar, gold, oil, interest rates) over 1, 3 and 10 years and the long term, plus the beta to the S&P 500: a beta of 1.5 means the asset moved on average 1.5 times as much as the index. Use correlations to understand risk in a portfolio. Two assets with a correlation of +0.8 are not two separate bets. Correlations describe the past and change over time, especially in crises, when many assets suddenly fall together. 6. Seasonality: strong and weak months The seasonality table shows, for every calendar month, the average return and the share of years in which the month was positive, calculated from up to several decades of data. In the South Africa Top 40 analysis, for example, April was the strongest month (average +2.4 %, positive in 74 % of the years) and September the weakest (−0.7 %, positive in 44 %). Seasonality is a tailwind or a headwind for timing, never a reason on its own: a strong month in a falling market is still part of a falling market. 7. The interactive chart Between the free part and the technical analysis you can load an interactive chart with every timeframe and drawing tools. It only loads after a click (the chart comes from an external provider). Use it to see where the price stands today compared with the levels in the analysis. 8. Technical analysis: the Elliott Wave count This is the core of the method. Elliott Wave analysis reads markets as repeating patterns: trends unfold in five waves in their direction (an impulse) and correct in three waves (a correction). The analysis labels where in this structure the price stands, on several wave degrees from the long-term to the short-term picture, usually with charts on weekly, daily and hourly timeframes. From the structure follow the target zones. They are built from Fibonacci ratios: retracements (how far a correction pulls back, for example 50 % or 61.8 % of the previous move) and extensions (how far a new wave may run, for example 1.618 or 2.618 times a reference wave). Where several ratios meet, the zone is stronger. Volume and price action are used to confirm the count. Example: South Africa Top 40 Index The analysis reads the index as being in a Wave 4 correction inside a larger, final Wave 5 advance. The correction unfolds as A-B-C: wave A is complete, wave B has tested Target Zone 1 and may complete there or with a small new high. Target Zone 1 (end of wave B): about 112,000 to 118,983 ZAR Target Zone 2 (end of wave C and of the whole Wave 4): 88,648 to 80,912 ZAR, the 50 % to 61.8 % retracement Target Zone 3 (end of the larger Wave 5): 155,861 to 185,015 ZAR Invalidation: 71,904 ZAR. A wave 4 may not overlap the price territory of wave 1, so a sustained close below this level would break the count. Read the technical analysis in this order: which wave is running now, which target zone comes next, and which level would prove the count wrong. 9. Scenarios and probabilities Markets do not follow one path. The analysis therefore names a primary scenario (the count considered most likely) and alternative scenarios, each with what would trigger it. Where a probability is given, it is an informed estimate from structure, Fibonacci relationships, volume and the backdrop, not a statistical certainty. Pay attention to the triggers: a price level whose break would make the alternative the new main case. In the example above, a sustained break above Target Zone 1 without a reversal would require a recount, and a break below 71,904 ZAR would invalidate the Wave 4 count altogether. Good analysis does not avoid being wrong; it tells you in advance where it would be wrong. 10. The potential trading plan This section translates the scenario into concrete levels: where a position could be built (entry zones, often in several parts with an allocation per part), where profits could be taken (take-profit levels, often in steps) and, where the analysis sets one, a stop-loss. Not every analysis has a stop-loss or an invalidation level; they are written only where the scenario defines them. In the example, the plan builds the full position at the upper end of Target Zone 2 (88,648 ZAR), sets a stop for half of the position at the invalidation level (71,904 ZAR) and exits completely at the lower end of Target Zone 3 (155,861 ZAR). For existing holders it suggests taking at most 30 % of the position off in Target Zone 1. Every plan is carried out in the EllTec Analysis Tracking Portfolio, so its results can be checked over time. Before you act on any plan, size the position to your own account: the tranche calculator and the position size calculator in the education tools show the average entry, the capital that fits a fixed risk per trade and the reward/risk of each target. 11. Risk assessment The last analytical section lists the risk factors in a table (for example regulation, debt, currency, competition, political risk), each with a rating, and ends with an overall assessment and the Risk Score from 1 to 10: 1 is very low risk (green), 10 very high (red). Below it, measured figures from the price history are added automatically: volatility over 1 and 3 years, the largest drawdown, the distance to the highest close and the worst week in 3 years. A high Risk Score does not mean the idea is bad. It means the position should be smaller and the swings larger than with a low score. 12. After publication An analysis is not a one-off text. Prices are checked every day. When the price reaches an entry zone, subscribers of the asset class get a price alert; when a scenario changes, newsletter readers get an update. In the screener every analysis shows its status: active (the scenario is running), target reached or invalidated. Fundamentals, correlations, seasonality and risk are updated every quarter. 13. Five common misreadings MisreadingWhat is meant instead "The target is 155,861, so the price will get there." A target zone is where the count expects the move to end if the primary scenario holds. "65 % means it will work." It fails about one time in three. Position size and the invalidation level handle that third. "The entry zone is reached, so buy everything now." Plans often spread the entry across a zone and wait for confirmation of the structure. "No stop-loss given means no risk." Some plans hold through swings on purpose. Your own risk limit still applies. "The target should be reached soon." Elliott Wave targets describe price, not time. Large degrees can take years. 14. A ten-minute reading routine Read the summary and check the update date. Look at the cards: EllTec Analysis Score, Fear & Greed, macro backdrop and, as a subscriber, the Risk/Reward Score. Skim the fundamentals tables by colour and read the conclusion. Check whether the macro backdrop is a tailwind or a headwind. Note the two or three strongest correlations and the beta. Find the current wave and the next target zone. Write down the invalidation level or the trigger of the alternative scenario. Read the trading plan and compare the entry zone with today's price on the interactive chart. Read the Risk Score and decide how large a position would be for your own account, if any. Set yourself a reminder for the levels that matter, or follow the price alerts. Try it now Open the free South Africa Top 40 Index analysis and go through the routine. Terms you do not know are linked to the glossary; for buying in parts use the tranche calculator. Questions about prices, the trial or the method are answered in the frequently asked questions. This guide explains how EllTec Analysis reports are built. It is not investment advice and no recommendation to buy or sell. The figures of the example are taken from the published analysis and can change with later updates.