Bank Nifty Outlook and Trading Strategy for 20 May 2019

| May 19, 2019

Bank Nifty opened higher at 28881, registered day’s low 28856 and bounced back by more than 600 points to registered day’s high 29559 and finally closed 594 points up at 29450.

Friday, 28840 was the immediate downside breakeven point and Bank Nifty was expected to decline further towards 28667-28525 if breaks and stay below 28840 for 15 minute. 29294 was short/Medium term upside breakeven point and any upside reversal was expected after breaking above 29294 only.

No advanced trade was suggested in the report. I suggested Buying in 29000 Put and Selling in 28000 Put [at 700/335 respectively] of 23rd May expiry in live market hour through whatsapp and suggested to hold till Monday (till further update). Any exact trade in BN Futures or Options was not advised because BN was not showing signs of weakness near 29294. 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 Elliott Wave Outlook and Trading Strategy of Bank Nifty for 25 February 2019 Onward

Elliott wave counts of Bank Nifty on Daily chart

Elliott wave counts of Bank Nifty on Daily chart

This is Daily time bar chart of Bank Nifty covering move from low 24240.

It seems wave completed from 24240-27754 may be wave (A or 1), wave completed from 27754-26441 may be wave (B or 2) and wave (C or 3) may be completed at 30670.

38% retracement of progress of wave (C or 3) is placed at 29054 which is already broken, so Bank Nifty entered in short/medium term negative zone and warning cautions for further decline towards 26617-24240 in coming days/weeks.

Now, we need to analyze the move started after 30670 on separate lowest time frame chart to check its pattern and internal wave counts.

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 30670. The pattern of the chart became confusing because there is possibility of Irregular Correction at bottom but the sharp bounce after 28525 overlapped previous waves. Overall pattern is confusing but I am trying to mark most probable counts.

It seems wave completed from 30670-28582 may be 1st cycle of [ABC] and wave [X] may be in progress as Irregular Correction.

Within wave [X], it seems wave completed at 29055 may be wave [A], irregular wave [B] may be completed at 28525 and wave [C] may be in progress.

38% retracement of progress of wave [C] of wave [X] is placed at 29164 which is the immediate downside breakeven point. Bank Nifty if breaks and stay below 29164 for 15 minute can result in further decline towards 28525.

Now, let’s analyze the progress of wave [C] of wave [X] on separate lowest time frame chart to check its pattern and immediate important levels.

Elliott wave counts of Bank Nifty on 05 Minute chart

Elliott wave counts of Bank Nifty on 05 Minute chart

This is 05 Minute time bar chart of Bank Nifty covering move from 28525 which I am expecting start of [C] of wave [X] on the previous chart.

It seems wave (1) may be completed at 28649, wave (2) may be completed at 28546, wave (3) may be completed at 29312, wave (4) may be completed at 29210 and wave (5) may be completed at 29559 or still in progress.

Wave (5) achieved 38% projection after breaking above 29510 whereas next 61%-100% projection is placed at 29696-29997 which may or may not be achieved.

Conclusion and Outlook:-

Bank Nifty broke below major downside breakeven point 29040 and was indicating further decline towards 26617-24240 but it bounced back and broke upside breakeven point 29294 on Friday. Overall pattern is still indicating fall below 28500 but upside breakeven point is broken. So overall outlook is not clear, may be the Bank Nifty is forming a complex pattern near big event.

Fibonacci Calculations wise, 29164 is downside breakeven point/trend deciding level and any downside reversal can be expected after break below 29164 only.

We need to keep all these conditions in mind while deciding next trade.

Trading Strategy:-

The biggest event (elections results) is there next week and pattern of Bank Nifty is not clear. So, it is impossible to decide trade in advance right now. So, any trade will be planned during live market hours only if gets low risk opportunity.

So, we will try to look for trading opportunity during live market hour and will send updates by WhatsApp Broadcast. Updates on hedged trade will also be given during live market hours.

Disclaimer: This analysis report is just for outlook, probabilities and expected markets behaviour based on my personal Elliott Wave Analysis. Any trade based on these reports is solely your decision. I will not be responsible for any trade, loss or profit.

 

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Category: Bank Nifty

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