Nifty and Bank Nifty Is a low in place? Will positive divergence work?

Nifty has been moving in volatile environment but even when Nifty broke below the earlier lows it did not produce downside momentum. On the contrary many have been extremely bearish by simply looking at US or global markets.

We can see series of positive divergences both on daily as well as hourly charts on Nifty and along with that Bank Nifty has still managed to protect its lows of 8^th October 2018 even when Nifty broke to fresh lows. This is a classical intramarket divergence. See the series of divergences below:

Nifty and Bank Nifty hourly chart:

Following was mentioned on 26^th October morning equity research report –

As shown on hourly chart, prices are currently near the resistance trendline and are hovering around it. After many weeks we are seeing the fall is getting smaller and smaller and the intensity looks to be reducing. Now break above the resistance level will suggest sudden reversal on upside. The chances of Extracting Triangle pattern will be high unless we see strong momentum building on the downside. As per this pattern post completion of wave (c) on downside we should see wave (d) which will be bigger than wave (b) rally. We will focus on wave (d) rally once there is confirmation by break above …. levels…. I think we should complete wave (c) on downside very soon but it is better to wait for resistance break for confirmation of a positive trend when majority will be caught by surprise.  chart: a classical intramarket divergence. See the series of divergences below:

ong with that ve been extremely

Happened: We have been warning our subscribers that the downside speed is reducing and it is better to stay alert in case of sudden reversal. On 29^th October, Nifty rallied by more than 200 points in single day. This clearly shows it is so very important to identify the pattern as per Elliott wave.

Series of positive divergences - With the rally we got series of positive divergences on index. You can see from the above chart where Nifty made fresh lows but RSI on hourly scale made a higher low. Also when Nifty touched 10004 levels, Bank Nifty managed to protect its earlier lows thereby giving classical intramarket positive divergence.

With the momentum reducing on downside despite of weak global markets and extreme pessimism is it time to take a contrarian stand and bet on upside?

So, which levels to expect on upside and what should be the stop. Know all this in the daily equity research report – “The Financial short term update”. We are on cusp of strong reversal provided the resistances are taken out decisively. But expect a good trade setup as Time cycles are also nearing the lows!

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