Elliott Wave Outlook and Trading Strategy of Bank Nifty for 10 December 2018

| December 9, 2018

Bank Nifty opened higher at 26307, registers low 26252 and bounced back again by more than 400 points to register day’s high 26659 and finally closed 396 points up at 26594.

Friday, Bounce of about 300-560 points was expected after completion of an impulse started from 27037 and 26149-26011 was the immediate support with 26011 as immediate breakeven point on downside.

Trading strategy was to sell 26000 Put of 13th Dec expiry if get Bank Nifty in 26011-25915 range using exact stoploss of 25913 [intraday]. Bank Nifty bounced by more than 500 points from last low but didn’t give chance to buy. Now, we need to analyze fresh charts to calculate further move.

This analysis report is covering decline from all time high 28388 which I am expecting as start of inner wave inner [4] of (iii) of bigger (3) in my last analysis report Elliott Wave Outlook and Trading Strategy of Bank Nifty for 08 October 2018 Onward

Elliott wave counts of Bank Nifty on 05 Hourly chart

Elliott wave counts of Bank Nifty on 05 Hourly chart

This is 05 Hourly time bar chart of Bank Nifty covering move from all time high 28388 which I am expecting start of wave [4] of wave (iii).

Wave completed from 28388-24240 seems corrective (ABC) type which I assumed as wave [4] of wave (iii).

From low 24240, it seems wave completed from 24240-25915 may be wave [A or 1] although pattern is not clear, wave completed from 25915-24353 may be wave [B or 2] and wave [C or 3] may be completed at 27037.

23%-38% retracement of progress of wave [C or 3] is placed at 26403-26011. So, 26403-26011 is short term support and 26011 is short term breakeven point on downside. Bank Nifty already entered in this support range and bounced back.

Now, let’s analyze decline started from high 27037 on separate lowest time frame chart to check immediate move/counts.

Elliott wave counts of Bank Nifty on 15 Minute chart

Elliott wave counts of Bank Nifty on 15 Minute chart

This is 15 Minute time bar chart of Bank Nifty covering move from high 27037.

It seems an impulse is already completed from 27037-26149 may be wave [a or 1] and wave [b or 2] may be in progress from 26149.

Within wave [b or 2], it seems wave completed from 26149-26490 may be wave (a or 1), wave completed from 26490-26341 may be wave (b or 2) and wave (c or 3) may be in progress from 26341.

100%-123% projection for wave (c or 3) is placed at 26682-26762 which is the minimum target range for completion of wave (c or 3) and is also the resistance. Next 161% projection is placed at 26892.

38% retracement of progress of wave (c or 3) is placed at 26537 which is immediate breakeven point on downside. Bank Nifty if breaks and stay below 26537 by more than 15 minutes can result in further decline towards 26341-26149.

Conclusion and Outlook:

Bank Nifty bounced by 300-550 points as expected and has possibility to bounce further towards 26682-26762 but 26682-26762 is also a good resistance from where a small or big decline can be expected.

On the other side, 26537 is immediate breakeven point on downside and Bank Nifty if breaks and stay below 26537 by more than 15 minutes can result in further decline towards 26341-26149 in coming days.

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

Trading Strategy:  

Bank Nifty is expected to be volatile and premium of options is very high because of Exit Polls and Election results on 11 Dec. So, options are very expensive for buying and it needs minimum 300-500 points move to get reasonable profit from options buying.

So, options buying must be in light quantity and we need to be quick to book profit. Try to exit options trade before Elections Results on 11 Dec because premium may decrease drastically after the declaration of result.

There are 02 low risk trading conditions on chart: –

 

  1. Suitable Put of 13 Dec or 27 Dec expiry can be bought if get Bank Nifty in 26750-26800 range using stoploss of 26901 expecting decline of 300-500 points.

 

  1. Suitable Put of 13 Dec or 27 Dec expiry can be bought if Bank Nifty breaks and stay below 26537 for 15 minutes using stoploss of 26661 expecting decline towards 26341-26149. Buy put in 26537-26659 range only.

Trade in light quantity and be quick in booking whenever getting reasonable profit. Option premium may rise till 11 Dec but can decrease sharply later.

These are low risk trading strategies I can suggest in these conditions. Otherwise traders can plan their own trade based on the conditions explained above.

DisclaimerThis 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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Also Read,

  1. Elliott Wave Analysis Report of Bank Nifty for 03 December 2018     
  2. Bank Nifty can Decline by 450-700 Points Before 26431
  3. Elliott Wave Outlook and Trading Strategy of Bank Nifty for 15 November 2018 Onward
  4. Elliott Wave Outlook and Trading Strategy of Bank Nifty for 11 October 2018 Onward
  5. Elliott Wave Analysis of Bank Nifty on All Time Frame Charts dated 08 October 2018

 

                                                           

 

                                                                                                                                                  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Category: Bank Nifty

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