Wednesday, June 12, 2013

Bank Nifty : Combining Head & Shoulder, Elliott wave and Momentum!

The below is published by Waves Strategy Advisors Pvt. Ltd. For more information visit or write to
Bank Nifty was one of the strongest index few weeks back. However there was a classical distribution and topping process near 13000 levels.
The below article shows how can we combine Elliott wave counts, patterns like Head & Shoulder, Channels, Fibonacci retracements etc.
Bank Nifty Daily chart: Anticipated on 5th June 2013: 
Published on 5th June: ….Recently after crossing its previous high of 13000 made on January 2013 it moved up and faced the resistance of the upper trendline and reversed. From past 2 weeks prices are moving lower by breaching its previous week low which opens negative possibilities.
As seen in daily chart, after forming Bearish Engulfing pattern on the top followed by the confirmation, prices then moved down accompanied by negative divergence on RSI (shown by blue line). We can also observe that prices have formed a topping H&S (Head & Shoulder) pattern and gave a bearish breakout on 31st May 2013.
From wave perspective, after completing wave ………..(Please note weekly chart and bigger wave counts are purposely not shown in above chart)
In short, as far as 13000 is protected on upside our bias for Bank Nifty is negative and it can move down till 11800 levelswhich comes near 61.8% retracement of the prior wave…
Happened as of yesterday’s close:

Happened: Bank Nifty made a low of 11795 and finally closed the trading at 11820. It moved exactly as per Elliott wave counts, Head & Shoulder, Fibonacci techniques. This can be seen as highlighted above. Prices moved towards the target of 11800 mentioned on 5th June. To know what is next subscribe daily research report “The Financial Waves” in which we cover Nifty along with 3 stocks on rotational basis.  

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