Bank Nifty Update. As on Mon 30 May 2022. CMP 36,000. Posted at 12 noon.
Bottom line : Bank Nifty is up healthily from 33,000, but this rally has not taken the form of an impulsive 5 waves as yet. So it is difficult to be too sure whether Primary count is playing out to new all time highs or whether this rally is wave E of a bearish triangle. For guidance, it is our opinion the Nasdaq is the best index to spot a turn due to the clarity of it's structure.
Our bias is towards the primary count, but would not take much to change our view.
Primary Count : The larger bullish triangle likely completed at 33,009. Price is headed up to new highs above 42K.
On the hourly chart, the inverse head & shoulders worked out well.
Alternate count : Due to lack of clarity in the sub-waves of the rally from 33,009, this count remains an uncomfortable option, where Bank Nifty is tracing out wave e of a bearish triangle, which after completion, would commence to decline to below 30K on a thrust lower.
Bank Nifty Update. As on 26 May 2022 CMP 34,850. Posted at 1:45 pm.
Bottom line : With Bank Nifty showing expected strength, the thrust from the bullish triangle could be the count playing out. However, to be conservative, it is neccessary to always keep stop losses.
On the 1 hour chart : an inverse head & shoulders has been confirmed with a break of the neckline. This puts the stop loss below right shoulder for the bullish view.
Count 1 : Bullish triangle possibly complete at 32,155.
If wave E of the triangle is confirmed, price is heading up potentially to new all time highs above 42K.
Count 2 : Short term bullish, intermediate term bearish.
Price is in wave E of a bearish triangle potentially towards 37,000 before the larger decline commences.
Note that minimum requirement for wave E has already been met, so if this count plays, a decline could begin at any time.
Market Commentary. As on Mon 23 May 2022.
Discussion of co-relationships between Nasdaq, Nifty, and Bank Nifty.
Bottom line : Short term bullish and Intermediate term bearish.
Starting off with Nasdaq : There is a clear 5 wave impulse down from 16K to 11K. We take this very seriously. If companies like Alphabet (Google), Facebook, Microsoft etc are going to decline significantly, then it is most unlikely Indian companies and indices will be spared. Moreover, the patterns on the indian indices are also relatively clear although there is no 5 wave impulse to the downside.
Nasdaq formed a 5 wave impulsive decline with the 5th wave as the largest wave. Within the 5th wave, it’s own sub-divisions show the 5th wave was also extended. This could mean a rapid rally in the Nasdaq back to the 61% – 78% fibonacci retrace at 14,500 ~ 15,500 levels, which also coincides with 4th wave of lower degree. This makes it an important resistance level. As long as Nasdaq does not exceed the all time high of 16,765, the 5 wave impulse remains an extremely important signal.
Bank Nifty : Since Nasdaq is the clearest of the major indices we have, a correlation with it would be a sensible way forward to deal with both Nifty & Bank Nifty. Bank Nifty has 2 counts, both are short term bullish to at least 36-37K. One of the counts calls for new all time highs above 42K.
2 seperate counts shown below.
Nifty also has 2 options. Both of which are short term bullish. One of the options calls for a rally above 18,300. See previous Nifty post for short term analysis.
2 seperate counts shown below.
Conclusion : With a major index like Nasdaq providing a clear signal, it would be unwise to ignore it. At least another 5 wave down below the recent low of 11,492 is on the cards, but first a significant upward retrace (rally) is likely.
Bank Nifty Update. As on Fri 20 May 2022. Posted at 1:20 pm. CMP 34,200.
Bottom line : The crucial levels of 32,155 and the recent low of 33,007 held. Yesterday's mayhem did not violate even the higher level. We suspect it is now upward and onward from here to at least the 37,000 level, and possibly to new all time highs above 42,000.
Both these counts are based on 33,007 not being violated in the near term.
Count 1 : Intermediate term bearish. Short term bullish.
Count 2 : A larger bullish triangle could well be complete at 33,007 and price is in the early stages of a thrust up to new all time highs. Based on simple triangle width measurement, the target for wave 5 comes in at 44,000.
Bank Nifty Update. As on Wed 18 May 2022. CMP 34,300. Posted at 12:30 pm.
Bottom line : Near term Bullish against 33,807. On the 10 minute chart, price appears to in a 3rd of 3rd wave to the upside. 33,807 cannot be violated without re-evaluating the short term count.
Count 1 : The larger triangle appears complete at 33,009 and price is in the early stages of a large uptrend towards 38K ~ 39K, and potentially to new highs above 42K.
Count 2 : Price is in the early stages of wave D of a large bullish triangle.
Count 3 : This is intermediate term bearish. But even then, wave E to the upside is too short in terms of time. If new lows form in the near term below the recent low of 33,007, this count would take precedence over the others.
Bank Nifty Update. As on Monday 16 May 2022. CMP 33,597. Posted at 4:15 pm.
Bottom line : With price on Nifty & Bank Nifty hovering near the lows, further near term lows cannot be ruled out on both indices.
We view Bank Nifty's support level of 32,155 as more important than Nifty's support level at 15,671. It is important for all 3 counts below that it holds.
Bank Nifty count 1 : As long as 32,155 is not violated, there is a reasonable probability that wave E of a large bullish triangle is nearing completion.
Bank Nifty Count 2 : The level of 32,155 is also important in case wave D of the larger bullish triangle is still in progress.
Bank Nifty Count 3 : Even if price is in a larger bearish triangle, it is still important for the 32,155 level to not be violated, in order for wave E to commence to the upside.
Market Commentary. As on Thurs 12 May 2022.
We have a situation where Nifty and Bank Nifty are in conflict. In our experience, Bank Nifty usually wins out, but not always. As in all things market, anything can happen, but is useful to be aware of. Let us see if this conflict can be reconciled in any way.
Bank Nifty has an interesting pattern where a bullish triangle may be complete or almost complete. Whether today’s low has completed wave E, time will tell. A strong bullish pattern from here on BN may be just the tonic for Nifty to also test the 18,100 level.
The problem with this is if new highs are expected in bank nifty that means an upside of 25% from current levels. This may be a stretch, but it is possible as long as 32,155 (wave C of triangle) is not violated.
There is a way to reconcile Nifty and Bank Nifty : It is that Bank Nifty ends with a truncation at about 38K ~ 39K in 5 waves, but falls short of new highs in its larger 5th wave, i.e. does not exceed 41,827.
This would then bring back focus into the Nifty alternate count where a test of 18,000 ~ 18,100 could be on the cards.
It is early to say, as 15,671 needs to hold first. Now lets deal with what happens if 15,671 gives way ? Read below.
If 15,671 gives way, it is not necessarily one way bearish. There could still be significant bounces in the interim, with wave X taking the shape of a large bearish triangle, or even an expanded flat which would test the 18,000 ~ 18,100 level.
Preferred count as long as 15,671 is not violated is the one shown this morning, which shows a bounce soon to above 17K.