Bank Nifty can Bounce Sharply Towards 22496-22625 Because of Ending Diagonal Pattern

| May 4, 2017 | 0 Comments

Bank Nifty again opened higher at 22445 and declined to register day’s low 22240 and finally closed 34 points down at 22307.

Yesterday, 22296 was the stoploss for existing longs for minimum upside target 22641. Stoploss of 22296 was triggered because Bank Nifty declined further till 22240 to make Ending Diagonal Triangle Pattern and finally closed at 22307. 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 running. Minimum 38%-61% projection for wave (5) is at 22033-22432. Thus wave (5) achieved minimum target 22033 and next possible target is 22432.

Wave (5) achieved its minimum projection and now we need to analyze the progress of wave (5) started from 21386 on separate 15 Min chart to check the pattern.

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 showing bounce from 21 Apr 2107 low 21386 which is the start of wave (5) on previous chart.

Inner waves of wave (5) are not clear but steep bounce till 22250 may be the end of wave 3 and wave 4 may be completed from 22250-22108 as an Irregular Correction and wave 5 may be in progress. Minimum 38%-61% projection for the wave 5 is placed at 22438-22641 where 22438 is already achieved and 22641 may or may not be achieved.

Wave (5) already achieved its minimum 38% projection but the pattern does not seem completed and looks like progressing as Ending Diagonal Triangle. Within wave 5, inner waves (i),(ii),(iii),(iv) are completed and (v) may be in progress. These waves following all the rules of ED (Ending Diagonal Triangle) pattern which occur only in wave 5 of any impulse as shown in the chart.

61%-100% projection for the wave (v) is placed at 22478-22625. So, Bank Nifty can bounce again for a minimum possible target of 21478-22625 and 22184 must be the stoploss for longs.

Conclusion and Outlook:

Wave Counts on the chart are indicating that wave 4 may be completed at 22108 and wave 5 may be in progress following the pattern ED (Ending Diagonal Triangle).And 61%-100% projection of inner wave (v) of ED  22496-22625 is our next minimum possible target with stoploss 22184 (end of wave (ii) of ED).

But there may be small or big correction of completion of ED because we often see a sharp reversal of completion of ED. So, there are cautions for decline after achieving 22496-22625 range.

For Trading,

  1. For Fresh Trade, Bank Nifty can be bought if get near 22260-22200 using stoploss of 22184 expecting minimum targets 22496-22625.

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Category: Bank Nifty

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