Bank Nifty - Why It Is About To Trend, Get Ready!

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BankNifty has been moving precisely as per neo wave count. Checkout this example of how we applied ADX with Price Action to identify the wave counts and predict the price movement.

Following research is picked up from daily equity research report – The Financial Waves short term update

Bank Nifty daily chart:

Bank Nifty hourly chart:

In the previous update dated on 28th October, we had mentioned that, “Banknifty is at a deciding point ahead of FED and RBI announcement as it will affect market sentiments. For now, any move below 41000 can accelerate further selling pressure.” Bang On!!! Bank Nifty moved precisely and made low of 40819.

In the previous session, Bank Nifty opened on a flat note and whole day moved in a non- directional manner. At the end of the day, prices closed with a minor loss of -0.10%.

On the weekly chart, this week prices are back near its previous swing high which was near 41800 levels which was formed in a month of September. It would be interesting to see whether we get a break above it or reversal back from it. This week is going to be an important one.

As shown on daily chart, from past few sessions, prices are trading a range of 40800-41700. From a medium-term perspective, any break of the range is needed to understand a bigger trend. On the other hand, Adx is trading at 17 giving indication of lack of momentum. As per wave perspective, wave (e) is unfolding on the upside.

On the hourly chart, we have applied Bollinger Bands. As we can see that, bands are looking squeezed. The Bollinger Band Squeeze occurs when volatility falls to low levels and as a result Bollinger Bands are getting narrower. Such Period of low volatility are often followed by period of high volatility. In short within 1 or 2 trading sessions we can witness a big move. As per wave perspective wave x looks to be completed on the downside and next leg has started on the upside.

In a nutshell, Bank Nifty is moving in a lackluster fashion. For now, any move above 41700 is needed for fresh buying to emerge. Whereas any move below 40800 can accelerate further selling pressure. Until this happens short term consolidation can be seen.

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