Elliott Wave Analysis Report of Bank Nifty for 22 May 2017

| May 21, 2017 | 0 Comments

Bank Nifty opened higher at 22761 and further bounced by more than 150 points to register day’s high 22902 but declined back sharply just after registering high 22902 to register day’s low 22628 but again bounced back and finally closed 71 points up at 22769.

 

Friday, No exact trade was suggested, I just advised to wait for formation of inner waves of wave (B or 2) normally in 22781-22856 to take shorts for about 300 points. Bank Nifty moves exactly as I expected but whole move was fast and completed in a single day only with Irregular Correction. It was impossible for to suggest trade because expected action completed on Friday only but experienced trader may have use this opportunity. Now, we need to analyze latest chart for 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 Elliott Wave Analysis of Bank Nifty on all time Frames Dated 03 April 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 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) 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.

Inner wave (iv) of (5) from 22834-22578 was Irregular Correction which confused us for 2-3 days and our stoploss was triggered and inner wave (v) of (5) is also extended. Extended wave (v) of (5) is started from 22578; So Bank Nifty can give sharp decline towards 22578.

Otherwise, 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. Bank Nifty achieved 22660 till now.

But if we look at the pattern of decline from all time high 22978 then a (abc) correction seems completed which is the point of some confusion.

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 5 Min chart

Elliott wave counts of Bank Nifty on 5 Min chart

This is 5 Min chart of Bank Nifty covering move from all time high 22978.

It seems wave (a) completed from 22978-22710, wave (b) completed from 22710-22902 as Irregular Correction and wave (c) may be completed from 22902-22628, wave (c) projection just more than 100%.

I was expecting wave (b or 2) upwards followed by wave (c or 3) downward [almost 100% of (a or 1)]. That (b) upward and (c) downward happened but in a single session and wave (b) became irregular.

Now, this (abc) correction is already completed at 22628 the Bank Nifty need to break above previous high 22978 again. Bank Nifty can decline back below 22628 again if the decline started from 22978 becomes complex correction.

And if we look at bounce from low 22628, then there are repeated upside impulses followed by downward correction, and it seems wave (a or 1) and (b or 2) is completed and (c or 3) in progress. And within (c or 3), it seems inner wave (i) and (ii) completed and (iii) in progress.

Normally the pattern made within the bounce from 22628 results in Gap up open or sharp bounce because there can be sharp and fast wave (iii) after (ii). So, bank Nifty needs to open Gap Up or bounce sharply from present levels otherwise can see decline.

End of very last wave 1, 22745 can be taken as breakeven point or stoploss for longs.

Conclusion and Outlook:

 We expected an upwards corrective bounce followed by impulsive sharp decline which happened on Friday only and many of clients may have missed this opportunity because of very fast action.

Now, most of the conditions are in favour of bounce above 22978 again and 22745 is the breakeven point and stoploss for longs. Next targets can be calculated only once Bank Nifty breaks above 22978 because we are not completely clear about previous waves.

For Trading:

Bank Nifty can be bought using stop loss for 22744 for minimum upside targets 22902-22978. This trade must be ignored if Bank Nifty already achieves 22902 at opening. And trade must be done only if get price 40-50 points near stoploss.

 

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