Bank Nifty Can Bounce Sharply Towards 24437-24704 in Short Term

| July 20, 2017 | 0 Comments

Bank Nifty opened higher at 24069 and further bounced by more than 150 points to register new all time high 24180 and finally closed 130 points up at 24152.

Yesterday, bounce for a new high above 24147 was expected and I suggested buying Bank Nifty 20 July 23800 call if Bank Nifty decline towards 23930-23900 range with stoploss of 23867 expecting minimum target above 24147. Bank Nifty achieved our targets above 24147 but trading range was not activated because of Gap up opening. Now, we need to analyze latest charts for further outlook.

This report is covering Bank Nifty move after 22 June 2017 high 23897 and earlier wave counts are explained in my previous analysis report Elliott Wave Outlook and Trading Strategy of Bank Nifty for 14 July 2017 Onward

Elliott wave counts of Bank Nifty on 30 Min chart

Elliott wave counts of Bank Nifty on 30 Min chart

This is 30 min time bar chart of Bank Nifty covering move from all time high 23897.

It seems some type of corrective pattern completed at 22995 and new upside impulse has been started. And may be inner wave (1) of Impulse is completed from 22995-23330, wave (2) may be completed at 23163 as an irregular correction and wave (3) may be completed at 24129 and wave (4) may be completed at 24004 as an irregular correction [although wave (4) is very small] and wave (5) may be running from 24004.

Minimum 38%-61% projection for wave (5) is placed at 24437-24704 which is the expected targets range for completion of wave (5).

Now, we need to analyze progress of wave (5) started from 24004 on separate 5 min chart to predict next move.

Elliott wave counts of Bank Nifty on 5 Min chart

Elliott wave counts of Bank Nifty on 5 Min chart

This is 5 min time bar chart of Bank Nifty covering move from 20004 which is the start of wave (5) on previous chart.

It seems wave completed from 24004-24167 may be wave inner wave (i) of (5), wave completed from 24167-24101 may be wave (ii) and wave (iii) is running from 24101.

Within wave (iii), it seems wave completed from 24101-24180 may be wave 1 and wave 2 may completed at 24139 or still be in progress.

Normally, 38%-61% retracement for wave 2 is placed at 24149-24131 from where Bank Nifty can bounce for a new high above 24180 towards 24437-24704 in coming days. Whereas wave 2 already achieved 24149-24139, so Bank Nifty can open gap up or bounce from present levels also.

Start of inner wave 1 of (iii) of (5) is 24101 below which the pattern explain will be negated and same can be used as stoploss for longs.

Conclusion and Outlook:

Bank Nifty again registers new all time high 24180 after breaking earlier high 24147 as expected but it still has possibility to bounce further towards 24437-24704 in coming days for completion of wave (5). And Bank Nifty can bounce sharply from present levels because wave (5) is within its inner wave (iii) which I known for steepness and gap openings.

24101, end of wave (ii) can be used as stoploss for longs.

Trading Strategy:

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

Buying Bank Nifty 27 July 24000 call at present levels (24152-24131) using exact stoploss of 24101 [End of wave (ii)] expecting minimum target for new high above 24180 towards 24437-24704.

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