Bank Nifty can Bounce Sharply above 22978 in June Expiry

| May 24, 2017 | 1 Comment

Bank Nifty opened higher at 22624 and registers day’s high 22673 but didn’t sustain at higher levels with negative bias and volatility. Finally Bank Nifty closed 46 points down at 22536 after registering low 22469.

Yesterday, Bank Nifty was expected to bounce towards 22740-22800 if break above 22591 and May 22500 call was suggested to buy with stoploss 22528 expecting same targets. Bank Nifty bounced till 22673 from 22546 but failed to achieve targets and declined back to trigger stoploss. Traders who bought May 22500 Call at 22591 may have booked 30-35 points loss. Now, we need to analyze fresh charts to calculate next move.

This report is covering Bank Nifty move after 9 Feb 2017 low 20003 and is further updated of my previous analysis report Elliott Wave Analysis Report of Bank Nifty for 23 May 2017

Elliott wave counts of Bank Nifty on 5 Hourly chart

              Elliott wave counts of Bank Nifty on 5 Hourly chart

This is 5 hourly chart of Bank Nifty showing bounce from 20003 which is start of wave (V) on previous chart.  This is the same chart with explanation which I had explained in my last report because wave counts are almost same.

It seems an impulse is completed from 20003-22978 as shown on chart. Inner wave (3) of this impulse is tricky and slower and wave (5) is faster and highly extended which projected more than 61%. These are the most probable count at this point of time.

23%-38% retracement of this whole wave (from 20003-22978) is at 22275-21840 which is the expected targets range on downside if impulse is already completed at 22978 and correction is already started.

Now, we need to analyze the progress of wave (5) started from 21386 on separate Hourly chart to check the pattern.

Elliott wave counts of Bank Nifty on Hourly chart

              Elliott wave counts of Bank Nifty on Hourly chart

This is Hourly  chart of Bank Nifty showing bounce from 21 Apr 2107 low 21386 which is the start of wave (5) shown on previous chart.

Wave 3 seems completed at 22491, wave 4 may be completed at 22241 and wave 5 may be completed at 22978 as shown on chart.

23%-38% retracement of this whole wave (5) (from 21386-22978) is at 22602-22369 which is the expected targets range on downside if the correction started where 22602 is already achieved. Bank Nifty declined till 22469.

But if we look at the pattern of decline from all time high 22978 then a (abc) correction seems completed or progressing as Complex Correction. So, let’s have a look at pattern of decline from all time high 22978 for confirmation and to calculate very short term move.

Elliott wave counts of Bank Nifty on 15 Min chart

             Elliott wave counts of Bank Nifty on 15 Min chart

This is 15 Min chart of Bank Nifty covering move from all time high 22978.

It seems the decline from all time high is forming Triple Zigzag correction where (abc-X1-abc) is already completed from 22978-22492. And Further, wave (X2) may be complete from 22492-22740 and last (abc) cycle started from 22740 OR wave (X2) is still in progress as Irregular Correction and there are 02 conditions:

  1. If wave (X2) is already completed from 22492-22740 then decline started from 22740 will be last (abc) cycle of Triple Zigzag Correction and Bank Nifty can bounce sharply above 22978 after completion of this last (abc) cycle.

 

  1. If wave (X2) is still progressing as Irregular Correction then Bank Nifty can complete wave (X2) at or above 22740 to complete wave (X2) followed by last (abc) cycle downward followed by a sharp bounce above 22978.

So, overall conditions are indicating a sharp bounce above 22978 again in coming sessions and we need to keep these conditions in mind when preparing next trading plan.

Conclusion and Outlook:

The decline from all time high 22978 is forming Complex correction type of Pattern as expected and Bank Nifty can bounce very sharply above 22978 after completion of this Complex Correction. It is difficult to calculate exact completion point of this Complex Correction but maximum downside limit is lower red line drawn of last chart.

And Bank Nifty needs to bounce sharply above 22978 after completion of this Complex Correction if I am right at identifying the pattern.

For Trading:

Conditions on charts are indication the possibility of Complex Correction and a sharp bounce above 22978. So short term strategy must be to “Buy on Dip” whenever get chance with small stoploss.

For Positional Option Trade: 29 Jun 23000 calls is available at 162. So, 29 Jun 23000 Call can be bought in light quantity at present levels tomorrow without any stoploss till further updates. This call can be hold without any stoploss and I will update further action later after seeing the progress or change in pattern.

Note: Quantity of Calls must be light so that you will be comfortable even if this 23000 call becomes zero.

 

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Category: Bank Nifty

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