Thursday, June 12, 2014

Bank Nifty Elliott wave, Channels, pivot levels!

Below is the chart of Bank Nifty. For daily research reports subscription please visit for subscription options

Bank Nifty Daily chart: 

Bank Nifty 60 mins chart:

           Wave Analysis:

For Bank Nifty, on 8th May 2014 prices resumed the uptrend from the level of 12950 and made a high at 15742 level on 16th May 2014. Since then Index has been moving in the consolidation and not yet taken out the high of 15742. In this whole consolidation prices have tried thrice to take out the level of 15742. More number of times a resistance is touched the more likely it is to be broken. However, price confirmation is important.

As shown in Daily chart, the current rally which started from the level of 10050 in the month of February 2014 increases the odd that triangle pattern which was ongoing since 2008 has completed near 10000 in form of intermediate wave [E] and ongoing up move is the new leg on upside.

The same can be seen on RSI. We have been using RSI to know any shift in the range rather than overbought/oversold level. In the start of 2012, RSI touched the level of 85 and after that medium term trend for Bank Nifty remained up which rallied from 9500 to 13500 levels. The same is the case with current rally, this time as well RSI has also touched the level of 85 and currently prices are consolidating at higher levels which indicates that index may be preparing for the next move on upside.

As shown in 60 mins chart, as per basic technical analysis after the sharp rise if prices consolidate within the range then it is a good sign. As per wave perspective minor wave (iii) completed at 15742 and ongoing move is in form of minor wave (iv). Currently, as prices have not taken out high of 16th May 2014, it is difficult to say whether wave (iv) is complete or not. Any move above 15750 level will suggest that minor wave (v) has started on upside.

In short, 15750 is the level which should be kept in mind for coming trading sessions. Any close above the same will take prices towards 16500 levels.

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