Bank Nifty Can Decline Below 26560 Without Breaking Much Higher Above 28602

| August 27, 2019

Bank Nifty opened huge gap up at 27663 and declined back by more than 800 points to register day’s low 26859 but bounced back again by more than 1100 points to register day’s high 27995 before closing 992 points up at 27951.

Yesterday, Bank Nifty was in negative zone and has possibility to decline further towards 26560-26027 and 27059-27082 was immediate upside resistance. 27289 was immediate upside breakeven point.

Trading strategy was to Sell Bank Nifty in 27059-27082 range but Bank Nifty opened huge gap up at 27663 which changed whole scenario and levels. Further updates with fresh levels and fresh outlook were sent during market hour (by whatsapp). Now, we need to analyze fresh charts to calculate further move.

This analysis report is covering very last bounce started from low 24240 which I am expecting as inner wave [4] or [5] of (iii) of bigger (3) in my last analysis report Fresh Elliott Wave Analysis of Bank Nifty on All Time Frames

Elliott wave analysis of Bank Nifty on Daily Chart

Elliott wave analysis of Bank Nifty on Daily Chart

This is Daily time bar chart of Bank Nifty covering bounce after 24240.

Wave completed from 24240-31783 seems corrective (abc) type, so either it is wave (1) of ED (Ending diagonal Triangle) or wave (B) of irregular Correction.

From high 31783, It seems wave completed from 31783-30623 may be wave (A or 1), wave completed at 31699 may be wave (B or 2) as Irregular Correction and wave (C or 3) may be in progress.

Within wave (C or 3), It seems wave (i) may be completed at 30346, wave (ii) may be completed at 30870, wave (iii) may be completed at 27392, wave (iv) or (v) may be in progress.

Wave (v) achieved its minimum 38% projection after but pattern doesn’t seems completed and internal waves overlapped. So there is possibility for wave (iv) to turn into Irregular Correction.

38% retracement of this whole decline after 31783 is placed at 27792-28555 and earlier high is 28602. So, 27792-28602 is major resistance and 28602 is major upside breakeven point. Any major reversal can be expected after stay and close above 28602 only.

Let me explain the possibility of Irregular Correction on separate lowest possible time frame.

Elliott wave analysis of Bank Nifty on Hourly Chart

Elliott wave analysis of Bank Nifty on Hourly Chart

This is hourly time bar chart of Bank Nifty covering move after 10782 which I marked as start of wave (iv) on daily chart.

The decline from 11181-10637 also look like 3 waves move and then waves overlapped. So, may be wave (iv) is still in progress with inner wave (A) completed from 28602, Irregular (B) may be completed from 28602-26560 and wave (C) may be in progress. Wave (C) must be an Impulse and can complete somewhere around 26802 followed by decline below 26560 again.

Or there are 02 more other possibilities: –

  1. May be wave (iv) completed at 26802 and the (abc) decline from 28602-26560 may be inner wave [i] of ED. Bank Nifty needs to decline below 26560 again without breaking above 28602 in this case.
  1. May be wave (v) completed from 28602-26560 as it achieved minimum 38% projection and I am wrong at identifying inner waves. 27792-28555 will be major resistance in this case (explained on daily chart).

There are multiple possibilities on this chart whereas Irregular Correction is most probable. And if we combine all the probabilities then 28555-28602 looks like a major resistance/trend reversal/pattern negation point.

Now, let’s have a separate look at bounce after 26560 to check its pattern on lowest possible time frame.

Elliott wave analysis of Bank Nifty on 5 minutes Chart

This is 5 minutes time bar chart of Bank Nifty covering bounce after 26560 which I am analyzing independently with alternate wave counts because there are multiple possibilities on hourly chart.

It seems wave (a or 1) completed from 26560-27663, (b or 2) may completed from 27663-26859 (retraced around 61% but pattern is not clear), and (c or 3) may be in progress.

Within wave (c or 3), it seems inner wave (iii) may be completed at 27995 or still in progress. 23%-38% retracement of progress of wave (c or 3) is placed at 27726-27561. So, 27726-27561 is immediate support and 27561 is immediate downside breakeven point.

Bank Nifty if breaks and stay below 27561 can result in further decline towards 26859-26560 otherwise further bounce for higher levels is possible.

Conclusion and Outlook:- 

For Short Term, Bank Nifty is in negative zone as long as trading below upside breakeven point 28602 and there is a possibility of further decline towards 26560-26027 in coming sessions. 27792-28602 is major resistance. 

For Intraday/Very Short Term, 27726-27561 is immediate support and 27561 is immediate downside breakeven point. Bank Nifty if breaks and stay below 27561 can result in further decline towards 26859-26560 otherwise further bounce for higher levels is possible.

Trading Strategy:

Short Term Trading strategy would be to “Sell on Rise” whenever getting opportunity as long as Bank Nifty Trading below 28602 expecting decline towards 26560-26000 in coming days/weeks.

Nifty is already near major resistance 27792-28602 where 28555-28602 is major upside breakeven point. The resistance range is big, so it is not possible to trade with small stoploss.

Nifty can either decline from present levels or from somewhere around 28602 and fall is expected to be fast. So, any suitable Put of 26500 below strike of Sep monthly expiry can be bought in 28150-28602 range in light quantity without stoploss expecting decline towards 26560-26000 in coming days/weeks. We can exit the trade if Nifty stay /close higher above 28602.

Please note, trade is to be done without stoploss because waves are bigger and we can’t place any exact small stoploss. All the money used for buying Puts can be lost if we go wrong in analysis, so adjust your quantity accordingly. Don’t be greedy and over excited and trade in light quantity which can afford to lose.

Any short term trade with small stoploss can be planned if get in 27726-27561 range only and same will be updated to “Live Updates Subscribers” through WhatsApp Broadcast during live market hours.

Further, any change in trend, or pattern or important levels or fresh support/resistance/breakeven point will be

updated during market hours through WhatsApp Broadcast.

Tags: , ,

Category: Bank Nifty

About the Author ()

Comments are closed.