Bank Nifty can bounce above 25780 sharply in coming days

| January 2, 2018

Bank Nifty opened higher at 25565, further bounced to register high 25588 and decline back again by more than 300 points to registers day’s low 25271 and finally closed 221 points down at 25318.

Yesterday, bounce above 25780 was expected and 25488 was pattern negation point. I suggested Bank Nifty 25400 call of 4 Jan 18 Expiry if bought Friday can be hold with fresh stoploss of 25487 expecting targets 25780 and above in coming days.  Fresh trade was also suggested with same stoploss and targets.

Bank Nifty found support around 25488 twice and same was broken in last 01 hour of the session and Bank Nifty decline by more than 200 point after triggering stoploss. Now, we need to analyze latest charts for next move.

This report is covering Bank Nifty move after 12 Oct 2017 from low 23611 and earlier wave counts are explained in my last previous analysis report Elliott Wave Outlook and Trading Strategy of Bank Nifty for 16 October 2017 Onward

Elliott wave counts of Bank Nifty on 5 Hourly chart

                               Elliott wave counts of Bank Nifty on 5 Hourly chart

This is 5 Hourly time bar chart of Bank Nifty covering move from low 23611. This is the same chart with explanation which I posted in yesterday’s report because there is no major change in wave counts on this chart.

It seems wave completed from 23611-24872 may be wave (A), wave completed from 24872-23916 may be wave (B ) and wave completed from 23916-25953 may be wave (C ).

Now, we need to analyze the decline started from high 25953 on separate lowest possible time frame chart.

Elliott wave counts of Bank Nifty on Hourly chart

                                  Elliott wave counts of Bank Nifty on Hourly chart

This is Hourly time bar chart of Bank Nifty Covering move from high 25953.

It seems wave completed from 25953-24813 may be wave [A], wave completed from 24813-25556 may be wave [B] and wave completed wave [C] may be completed at 24617. Overall, it seems a correction may be completed as [ABC] pattern.

From low 24617, it seems wave 1,2, 3 may be completed till 25780 and wave 4 may be completed at 25271 or still in progress. Wave 4 already retraced more than 38% placed at 25322 which is the point of caution.

So, we need to analyze the progress of wave 4 started from high 25780 on separate lowest possible time frame chart to check its pattern.

Elliott wave counts of Bank Nifty on 15 Minute chart

                             Elliott wave counts of Bank Nifty on 15 Minute chart

This is 15 Minute time bar chart of Bank Nifty covering move from 25780 which is the start of wave 4 on the previous chart.

The whole decline from 25780 became very complex and it looks like a progress of Complex Correction (double zigzag or triple zigzag) where it seems,

1st (abc) cycle may be completed from 25780-25508, wave (X) may be completed from 25508-25733 and 2nd (abc) cycle started from 25733.

And within 2nd (abc) cycle, it seems inner wave (a) , (b) is already completed and (c) started from 25588. Wave (c) already achieved 100% projection placed at 25271 and next 123% projection is placed at 25196.

And within wave (c) of 2nd (abc) cycle, it seems inner wave I, ii, iii is already completed and v may be in progress. 38% retracement of wave iii is placed at 25392, So bank Nifty can give one more decline below 25271 without breaking higher above 25392 to complete wave v of (c). So, wave (c) can complete somewhere around 25196.

Conclusion and Outlook:

Bank Nifty decline by almost 250 points to break medium term breakeven point 25322 and further decline till 25271 but any bigger reversal is not confirmed yet because the pattern of decline look like a complex correction and there is possibility of very good bounce after completion of this complex correction.

The correction started from 25780 may complete as Double Zigzag because 38% retracement is already achieved and this correction may complete somewhere near 25196. On upper side, general breakeven point is around 25392 but it should not be used for trading alone within complex correction.

Formation of this very complex correction confused us 2-3 times and our trade failed.

Trading Strategy:

According to conditions on chart, safe trading strategy would be:

Bank Nifty if get below 25200 then 25100 call of 11 Jan expiry can be bought in light quantity without any stoploss. Stoploss will be decided on next day after triggering trade because stoploss may trigger and we can miss the bounce.  So, trade in light quantity because we are trading without stoploss.

And small traders can also buying “out of money” calls of 25500 if the capital is less. But don’t be greedy because if the decline is not complex correction then we can see a very sharp fall below 24700 in quick time (though rare possibility).

 

Contact me:

Emailewavinod@gmail.com

Call: 9796033671

WhatsApp: 9796033671

Website: www.ewanalyst.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Category: Bank Nifty

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