Elliott wave analysis of Bank Nifty and Trading Strategies for 08 May 2017

| May 7, 2017 | 2 Comments

Bank Nifty again opened at life time high 22853 but declined back more than 300 points to register day’s low 22514 and finally closed 115 down at 22604.

Friday, I suggested to avoid any fresh longs because most of the waves were extended and 22619 was the reversal point for the day and stoploss for all longs. Further, shorts were suggested if Bank Nifty touch 22618 with stoploss of 22689. Bank Nifty declined from high as expected and also declined 100 points below 22618 without hitting stoploss. Now, we need to analyze latest chart to find next move.

This report is covering Bank Nifty move after 9 Feb 2017 low 20003 and earlier wave and is further update on my last analysis report Bank Nifty can Bounce Sharply above 21946 in Short Term

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.

Same, wave (3) of (V) may be completed at 21697, wave (4) may be completed at 21386 as Irregular Correction and wave (5) may be completed at 22853 or still in progress. Wave (5) already achieved 61% projection and became extended wave where as next 100% is at 23080 which may or may not be achieved.

23%-38% retracement of this whole wave (from 20003-22853) is at 22180-21764 which is the expected targets range on downside if the correction started.

Now we need to analyze the progress of wave (5) started from 21386 on separate 30 Min chart to check the pattern.

Elliott wave counts of Bank Nifty on 30 Min  chart

                              Elliott wave counts of Bank Nifty on 30 Min chart

This is 30 Min chart of Bank Nifty showing bounce from 21 Apr 2107 low 21386 which is the start of wave (5) on previous chart. There is slight change in wave counts on this chart because of pattern formed at top.

Now, wave 3 seems completed at 22491, wave 4 may be completed at 22241 and wave 5 may be in progress. Inner wave (v) of 3 is an Ending Diagonal Triangle.

Wave 5 achieved its minimum 38% projection after breaking above 22663 and 61% projection is placed at 22923 which may or may not be achieved.

Now, we need to analyze wave 5 separately to see if pattern is completed or still in progress.

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 22241 which is start of wave 5 on previous chart.

Its seems an impulse is already completed from 22241 – 22853 as shown on the chart but the latter declined from 22853-22514 looks like corrective pattern because of overlapping within the declined.

If the corrective (abc) pattern is already completed from 22853-22514 then Bank Nifty needs to bounce for new high above 22853 again otherwise we can see a good correction in Bank Nifty. The top of very last bounce 22688 can be taken as reversal point or stoploss for shorts.

Conclusion and Outlook:

Bank Nifty registered new life time high 22853 but failed to sustained and declined sharply by more than 300 points as expected in last report. Now, 22688 can be taken as reversal point above which Bank Nifty can bounce above new high 22853 again otherwise downside target range is 22180-21764 if the reversal already started.

For Trading,

  1. Bank Nifty Shorts taken at 22618 on Friday can be hold with same stoploss of 22689 expected downward target range 22180-21764 in coming days.
  2. Bank Nifty if touch 22689 then same can be bought at 22689 with stoploss of 22639 expecting target range 22854-22923.

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Comments (2)

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  1. Balakrishna Rao says:

    In the 30 min chart above, ending diagonal for wave (v) will be confirmed only if the price breaks below the line connecting points 2 and 4 of the ending diagonal … however, in this case price has not broken this lower line of ending diagonal, hence it is not an ending diagonal ?!

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