BANKNIFTY: The power of ending diagonal
Though I predicted earlier 31000 as bottom of wave (IV), had I not missed the ending diagonal of lower degree of wave v (marked as a wedge) of wave (IV) in lower TF, I wold have predicted end of wave (IV) correctly. The power of ending diagonal is evident from the 1000 point movement in a span of 2 days and less than an hour.
Wave (V) will be formed in 3 i.e.,(A),(B) and (C). Now wave (A) in progress. There may be another 200 points movement to complete wave (A). Then move down to 31800 level to form wave (B).
Actually wave [V](the breaker represents circle in my previous charts), is unfolding as an expanded ending diagonal, which is more powerful than converging diagonal.
Wave (V) will be formed in 3 i.e.,(A),(B) and (C). Now wave (A) in progress. There may be another 200 points movement to complete wave (A). Then move down to 31800 level to form wave (B).
Actually wave [V](the breaker represents circle in my previous charts), is unfolding as an expanded ending diagonal, which is more powerful than converging diagonal.
Note
Generally we can’t predict BANKNIFTY exactly. However my assumptions are based on some theories and needs to be adjusted inline with the market condition. The formation of wave 4 (in circle) seems to be more sideways. It may move up to today’s high and then come down to little below today’s low to complete wave 4 and then move up to form wave 5. Wave 5(in circle) might be completed around 32200 or at around 32380. And then move down to form wave (B). The above levels are purely tentative. Always trade with price action i.e., bullish bearish candles/patterns, support and resistances and Fibonacci levels. Though I have taken them in consideration do your own analysis and decisions.Note
A word of caution. In an ending diagonal formation of fifth wave will be always tricky, because it has three dimensions 1. Ending at the top of the wedge( this is normal as per wave theory)
2. Overshooting to some extent over and above the top trend line (This happens most of the time than normal)
3. Undershoots. That means terminates half way without reaching the trend line (this happens occasionally)
Be cautious.
As a rule for ending diagonal waves 1 to 4 formed in abc. Wave 5 also to be formed in abc. A is formed with strong uptrend. Carefully watched for waves B and C.
Note
Present situation (2:45 pm) looks like wave 5 in progress. It’s last leg may end around 32250, before commencing reversal for (B).
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