Nifty Bank: Elliott Wave Analysis

 Nifty Bank daily chart

Nifty Bank 2 hour chart

Nifty Bank has opened with a gap up in the start of the week and later it shed all its gains making it move in a sideways to negative territory. Just like Nifty, it remained above the neckline of the bullish reversal pattern and closed above it. This indicates the relevance and the validity of the inverse head and shoulder pattern.

As shown in the above daily chart, prices are still moving in a lower highs and lower lows which is a negative sign. It is important for the index to break the falling trend line which will open fresh positive possibilities. Daily ADX is signaling that the preceding downtrend has no strength left as it is quoting at 13.81. This indicates that no intense fall in the index can be seen at least for some trading days and a relief rally is a possible.

From 2 hour chart, the index tested the neckline multiple times and it bounced from the support of the neckline which was earlier acting as a resistance (role reversal). MACD has given a fresh buy above the center line which opens the possibility that trend is positive for the index.

As per Wave theory, prices are all set to unfold wave c which is pending on the upside, this leg can soar till the resistance of the falling trend line and can test the level of 34300-34500 levels.

The summation is Nifty Bank is set to surge till 34300-34500 zone with support placed at 32600 levels on closing basis.


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