Elliott Wave Analysis Report of Bank Nifty for 24 May 2017

| May 24, 2017 | 0 Comments

Bank Nifty opened flat at 22674 and sharply declined by more than 180 points just after opening to register day’s low 22492 but bounced back by more than 230 points to register day’s high 22740. But Bank Nifty didn’t sustain at those level and finally closed 70 points down at 22582.

Yesterday, 22568-22485 was suggested as Edge and Bank Nifty 25 May 22500 call was suggested to buy if Bank Nifty decline towards 22568-22485 with stoploss 22457. Bank Nifty declined till 22492 at opening and 25 May 22500 call was available at 107-130 at morning.

Bank Nifty bounced from 22492 to register high 22740 and 22500 Call bounce from 107 to 250. So, 22500 25 May Call was giving double profit yesterday only. Let’s analyze fresh charts to calculate next move.

This report is covering Bank Nifty move after 9 Feb 2017 low 20003 and earlier wave counts and is further updated in my previous analysis report Elliott Wave Analysis Report of Bank Nifty for 23 May 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 Hourly chart to check the pattern.

Elliott wave counts of Bank Nifty on Hourly chart

                          Elliott wave counts of Bank Nifty on Hourly chart

This is Hourly  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.

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 22628 till now.

But if we look at the pattern of decline from all time high 22978 then a (abc) correction seems completed or progressing as Complex Correction. 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 15 Min chart

                              Elliott wave counts of Bank Nifty on 15 Min chart

This is 15 Min chart of Bank Nifty covering move from all time high 22978.

It seems an (abc) cycle is already completed from 22978-22628, an upward (abc) corrective wave completed from 22628-22918, again a downward (abc) corrective wave completed from 22918-22492 followed by smaller (abc) cycle again.

So, overall there are repeated (abc) cycles within this decline which is indicating the possibility of complex correction (Triple Zigzag). And we need to wait for this expected Triple Zigzag correction to initiate a good positional trade.

38% retracement of very last smaller wave (c or 3) is placed at 22590 as shown on chart. So, 22590 can be taken as breakeven point for Intraday above which Bank Nifty can bounce further towards 22740-22800.

Conclusion and Outlook:

The decline from all time high 22978 is forming Complex Pattern as expected and now there is possibility of Complex Correction on the chart. Either the pattern of decline can be progress of Complex correction Or Bank Nifty Can decline very sharp. And we need to wait for this expected Complex Correction to complete to take a positional trade.

And, 22590 is the breakeven point for Intraday above which Bank Nifty can bounce further towards 22740-22800.

For Trading:

We need to wait for completion of an expected Complex Correction to initiate a good positional trade. There will be a good low risk trading opportunity if pattern complete as Complex Correction.

For Intraday, Bank Nifty if even touch 22591 then Bank Nifty 25 May 22500 call can be bought in light quantity with stoploss of 22528 expecting Immediate targets 22740-22800.

And try to book or protect profit once Bank Nifty enters in 22740-2800 range because there is still a possibility of Triple Zigzag in Bank Nifty.

 

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