Nifty and Bank Nifty: Anticipated Happened and Wave forecasting.

- January 26, 2016

In my previous update dated 15^th October 2015 “Nifty in an expanding triangle” followed by “Nifty on brink to reverse” dated 24^th October 2015 and “Nifty to sink after confirmation” dated 11^th November 2015, I mentioned that Nifty will moved down to test the level of 7500 followed by 7200.

In the early January 2016 Nifty made a low of 7240 thus achieving my mention levels of 7500-7200 levels.

Even for Bank Nifty, my view was negative. I had mentioned that “any move below 17430 will open negative possibilities for this index which can drag prices near till 15550 levels” on 24^th October 2015.

Bank Nifty made a low of 14754 levels on 20^th January 2016, thus achieving our mentioned level of 15550.

The broader index fell to almost 8% this year and it seems that the worst is here to stay. However, there can be a reversal for both the indices over short term.

As we are aware that both the indices are moving in a declining channel, forming a lower high and lower low formation. Currently prices are showing resilience near the support of the falling channel. On smaller time frame both the indices have crossed its previous high thus opening short term positive opportunities.

As per wave theory

Nifty: The index is moving in a double corrective pattern (a-b-c-x-a-b-c). The sharp fall in early January 2016 can be named as wave a of the second corrective. So now after completing wave a at 7240, it now unfolds wave b of the second corrective which can move near till 7900 levels.

Bank Nifty: is also moving in a double corrective pattern. After completing the first wave of second corrective i.e. wave a at 14754 levels, prices are poised to bounce back near till 16800 levels in the form of wave b.

In short, expect Nifty and Bank Nifty to bounce from its January lows and will test 7900 and 16800 respectively over short term.

Nifty Anticipated in the month of October 2015.