Nifty Bank: Elliott Wave Analysis

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 Nifty Bank daily chart


Nifty Bank 2 hour chart


Analysis

Nifty Bank last week dipped till my level of 37600 which was the shaded portion in the above chart. On the last day of the week, prices bounced around from 37600 levels and closed above 38000.

As shown in the above daily chart, the index is on the brink to give a bearish crossover, once this is done the bias will continue to be negative for Bank Nifty. ROC continues to remain below the center line which is a negative sign. The resistance for the index is placed at 39230-39435 levels. I think Nifty Bank will sink towards the level of 37300-37000 over short term.

From 2 hour chart, if the index has the tendency to test its previous lows going ahead and can test the level of 37000 over very short period of time. If the index stays below 37300-37000 then it can further plunge towards 36500 levels. MFI has relieved from oversold terrain and can move back into it.

As per Wave theory, Nifty Bank can open two probabilities

Scenario 1- Wave v can be extended – If wave v is extended then wave i-ii-iii-iv are over and wave v will drag prices near till 34000-33000 levels over medium term.

Scenario 2- Wave I will be completed- If wave i will be completed, then wave ii will continue to remain sideways in the range of 38000-39000. Once it is complete wave iii on the downside will open for the above mentioned level.

In both the cases, the bias is negative but the formations can differ and I will continue to monitor the unfolding of waves and accordingly update it.

The summation is Nifty Bank continues to remain negative and can dip towards 37300-37000 followed by 36500 over short term. From medium term perspective it will test 34000-32000 levels.


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