Bank NIFTY has completed 5 impulse wave upward move from 7900 - 13400 odd levels. The corrective wave has started from 13400 odd levels and have completed it now after a wave B upward move in corrective wave sequence has started wave C of correction from 11700 odd levels.
Bank NIFTY Daily Chart Elliot wave Analysis
Bank NIFTY Weekly chart
Considering the principle of equality wave A & C the correction of wave C can be up to 9600 - 9800 odd levels in the index.
The index today it has touched a intraday high of 112340 which is 38.2% retracement of a move from 7900 - 13400 odd levels. The key resistance for the index can be around 11460 - 11620 odd levels. The bankex stocks charts included in the indices are also relatively weaker. So its advisable for traders to use the rally in the index to short around 11420 - 11700 odd levels with a stop loss of 12000 - 12200 odd levels. The positional shorts can be built on the index for lower targets below 10000.
Below 11000 and 10800 odd levels one can add more shorts in the index for lower targets. Traders are advised to avoid long positions until 11460 - 11620 - 11760 which are key resistances if crossed can move up towards 12000 - 12100 which is also 23.6% retracement on daily charts eventually can drift further towards lower targets.
The CNX NIFTY has formed inverted H & S pattern and have broken out which can test targets of 6280 odd levels. Although Bank NIFTY is relatively weaker waiting for opportunity on rallies and weakness with the confirmation of both indices would be better to short sell at higher levels is advisable.
Trade objectively and wisely with the consideration of own risk with amid volatility. The strategy would be to wait patiently for the right opportunity to unfold to probable profitable trade setups.
Raju V Angadi
Equity Research Analyst
To know more about probable counts contact us back on rvangadi@googlemail.com
Disclaimer: This is just an view based on the research of individual for educational purpose. So kindly trade along with the consultation of your financial adviser, market trends, price action and own risk appetite considered while investing or trading in stock markets.
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