Elliott Wave Outlook and Trading Strategy of Bank Nifty for 16 July 2018 Onward

| July 15, 2018

Bank Nifty opened flat at 27046 and traded 200 point range between 26902-27102 with up down swings and finally closed 90 points down at 26935.

Friday, I had mentioned that 26769 was good support on downside and 27300-27359 was good resistance on upside and Bank Nifty can give minimum 200-300 points decline without breaking higher above 27359.

Trading strategy was to buy Bank Nifty 27200 Put of 19 July expiry if get in 27300-27359 range using stoploss of 27371 expecting 200-300 points decline from fresh high or buy 26900 call of 19 July expiry if get 26791-26769 range using stoploss of 26719 expecting targets above 27164 in coming days. Bank Nifty traded in 26902-27102 range and none of the trade was activated. Now, we need to analyze fresh charts for further move.

This analysis report is covering bounce from 17606 which I am expecting as start of inner wave [3] in my last all time frames analysis report Elliott Wave Analysis of Bank Nifty on all time Frame charts Dated 01 April 2018

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 which I am expecting as start of wave [3] on the previous chart.

There is no change on wave counts on this chart, it seems wave [i],[ii],[iii], may be completed till 25198, wave [iv] may be completed at 23605 as irregular correction and wave [v] may be in progress.

If I am right at identifying the pattern then wave [v] must complete above 27652 (minimum 38%-61% projection for wave [v] is placed at 26505-28296 but earlier top is 27652), so 27652-28296 is the minimum range for completion of wave [v]) in comings weeks/months. But if am wrong at identifying wave [iv] as Irregular Correction then we can see one more decline below 23605.

So let’s look at the pattern of bounce started from 23605 if it carries the personalities of wave [v] or not.

Elliott wave counts of Bank Nifty on 05 Hourly chart

Elliott wave counts of Bank Nifty on 05 Hourly chart

This is 5 Hourly time bar chart of Bank Nifty covering bounce from 23605 which I had marked as start of inner wave [v] of wave [3] on the previous chart.

It seems wave completed at 24651 may be wave (1), wave completed at 24087 may be wave (2), wave completed at 27164 may be wave (3) and wave (4) or (5) may be in progress.

If wave (4) already completed at 26060 then minimum 38% projection for wave (5) is placed at 27591. So, Bank Nifty needs to bounce higher above 27591 without breaking below 26060 in this case.

38% retracement of the progress of wave (3) is placed at 25988 which is the short term breakeven point below which we can think of any big downside reversal.

Now, we need to concentrate on bounce started from 26060 on separate lowest time frame chart to calculate immediate moves.

Elliott wave counts of Bank Nifty on 30 Minute chart

Elliott wave counts of Bank Nifty on 30 Minute chart

This is 30 Minute time bar chart of Bank Nifty covering move from low 26060. This bounce may be the progress of wave (5) as marked on 05 hourly chart.

Wave completed from 26060-26289 may be wave (i), wave completed from 26289-26132 may be wave (ii) as irregular correction, wave (iii) may be in progress from 26132.

Within wave (iii), it seems wave 1, 2 is already completed and 3 may be already completed at 27164 or still in progress from 26411.

Note: – Inner wave 1 of bigger (iii) is larger than wave (i) but I am not able to identify any other pattern within this because of steep rise with continuous gap ups. These are most probable wave counts i can mark at this point.

Because the whole wave from 26060-27164 is steep without any reasonable correction, we need to take retracement of this whole wave to calculate Support range.

So, 23%-38% retracement of this whole bounce is placed at 26920-26769 which can be assumed as immediate support and 26769 is breakeven point below which we can think of any reversal.

Overall, Bank Nifty can give one more bounce towards 27164 from 26920-26769 range without breaking lower below 26769.

Now, let’s have a separate look at decline started from 27164 to check its pattern.

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 27164 which I am expecting as progress of Corrective Pattern.

It seems wave (a) completed from 27164-26972, (b) completed from 26972-27102 as Irregular Correction and wave (c) may be in progress. Normal 100%-123% projection for wave (c) is placed at 26910-26864 whereas earlier low is 26902, so 26902-26864 is general expected range for completion of wave (c).

Within wave (c), it seems inner wave (i), (ii), (iii) is already completed and wave (iv) or (v) may be in progress as marked on chart. So, Bank Nifty can register one more low below 26902 to complete wave (c).

Conclusion and Outlook:

For Medium/Long term, there is possibility of big Irregular Correction at top, so Bank Nifty is still in medium/long term positive zone and there is possibility for new high above 27652 either from present levels or from 23611-22998. This upside rally must be sharp because of Irregular Correction and it is sharp till now. But we still not confirmed if bottom is already made or pending because pattern at bottom is not completely clear.

For short term, there is no change in outlook, Bank Nifty bounced about 1100 points from 26060-27164 without any reasonable correction which is making it difficult to identify exact inner waves. But pattern doesn’t seems completed so one more bounce towards 27164 is expected in coming days which can extend further towards 27591 with mild corrections in between.

Fibonacci retracements wise, 26920-26769 is support range on downside and Bank Nifty can register one more high above 27164 without breaking much lower below 26769.

Trading Strategy:  

According to conditions on charts, trading strategy must be buying on dips as long as trading above immediate breakeven point 26769 expecting bounce above 27164.

So, 27200 call of 19 July weekly expiry can be bought if get Bank Nifty in 26900-26769 range using stoploss of 26739 (some points below 26769) expecting bounce above 27164 in coming days. I suggested out of money call because stoploss is big otherwise traders can select their own strike price based on their risk tolerance.

This is most probable trade I can suggest in these conditions otherwise one can plan his/her 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.

CLICK HERE to get Elliott Wave Analysis Reports of Bank Nifty Daily by Email with Expected outlook, Targets, Stoploss and Trading Strategies.

Also Read,

  1. Further Elliott Wave Analysis updates of Bank Nifty for 03 July 2018 onward
  2. Elliott Wave Analysis Report of Bank Nifty for June 2018 Expiry
  3. Bank Nifty can bounce above 27164 in coming days
  4. Elliott Wave Outlook and Trading Strategy of Bank Nifty for 06 June 2018 Onward
  5. Elliott Wave Outlook and Trading Strategy of Bank Nifty for 23 May 2018 Onward
  6. Elliott Wave Analysis of Bank Nifty on All Time Frame Charts [ Dated : 01-April-2018 ]
  7. Bank Nifty Can Bounce by 1300-2000 Points After Achieving 24048-23842
  8. Bank Nifty Can Decline Sharply by 1000 Points After Achieving 25009
  9. Elliott Wave Analysis of Bank Nifty for All Time Frames as on 08 January 2018
  10. Bank Nifty can bounce above 25780 sharply in coming days
  11. Elliott Wave Outlook and Trading Strategy of Bank Nifty for 07 December 2017 Onward
  12. Elliott Wave Outlook and Trading Strategy of Bank Nifty for 07 November 2017 Onward
  13. Elliott Wave Targets of Bank Nifty for October 2017 Expiry

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Category: Bank Nifty

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