Bank Nifty:Plan of Action & What FOLLOWED( +18.52% OR +7298 pts)

We witnessed an awesome planned fall in Bank Nifty, hope you all enjoyed and made money with the idea.

Lets look at the Plan of Bank Nifty & Nifty

My Favourite Bank Nifty first

& Nifty

Lets dig deep into the structure & my thought process behind it


First thing First "KEEP IT SIMPLE BABY''

Model 1 (ABC(Elliott ABC)/Pole & Flag/ABCD Harmonic Pattern) what ever you call it, its the simplest of the pattern to recognise & trade

Elliott Wave (ZigZag)

- ZigZag is a 3 waves ''Corrective'' structure in bigger 5 wave "Impulse"
- Subdivision is 5-3-5
- Wave B can be any corrective structure ie zigzag-flat-triangle

Fibonacci Relationship between waves are
- Wave C = 61.8%, 100%, 127.2% or max 161.8%(need to be careful while labeling wave C as wave 3 is 161.8% of wave 1)
- Wave B = 50%, 61.8%, 78.6% or 86%


Pole & Flag

- Basically Flag is a pattern which forms after market has moved some distance
- Flag is a consolidation pattern used to participate in the previous move, that can be up or down
- Basic & Logic of the flag is as simple as, any consolidation which is in-between parallel channel
- Trade can be initiated on break of parallel channel
- Fibonacci relation for the flag can be specified in 2 reversal points(Profit Taking Zone)
1) 61.8% projection of first leg, which should end in the range of 'CENTER LINE REVERSAL'' of parallel channel
2) 100% projection of first leg, in this case, price reverse from bottom of the parallel channel

Harmonic Pattern( Bullish ABCD)

In Harmonic Pattern (Bullish ABCD) it is labelled as ABCD, instead of ABC of Elliott wave and all the harmonic patterns are derived form understanding ABCD structure,

Fibonacci Relationship of all legs
BC= 61.8%-78.6% of AB
CD=127.2%-161.8% of BC
CD=AB
CD=127.2%-161.8% of AB

Now lets come back to Bank Nifty Plan

As per the above study, we can easily identify Impulse and Corrections
Points were considered while planning
- the rally following 20 Dec 21:1300 hrs was not Impulsive in nature
- Price was struggling to rise above 61.8%-78.6% fib retracement resistance level & hovering in the range
- 12 Jan-02 Feb-10 Feb formed ''TRIPPLE TOP" with narrow range of 1.38%
- for the said pattern we witnessed a breakdown on 24 Feb 22 on opening candle

Now the some important points to consider from ''Elliott Wave Principles''

- Wave B structure
As per Elliott Wave, Wave B can be a ZigZag, Flat or triangle(TO KEEP IT SIMPLE - not to go in complex corrections)

Possibilities of Correction
Case 1(Zigzag)

Case 2(Flat)

Case 3(Triangle)

Now from the above two patterns we can eliminate which doesn't fits the pattern
Case 1(flag) eliminated

we are not left with case 2 & 3 or say Possibiltiy 2 & 3

As per possibility 2 (flat) we get

As per possibility 3 (Triangle) we get

Both of the labeling stated Bank Nifty & Nifty are heading lower

We will wind up this, you can keep sharing & liking the effort of the author so that I can come up with more in future

Wish You Happy & safe trading

Views are for ‘’EDUCATIONAL PURPOSE ONLY’’ trade at your own risk.

"Always Respect Risk"

Happy Trading
Jai Hind





















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Comment:

The above setup was planned for 18.52% drop in price which concluded on 08 Mar 22 with exact -18.52% drop making low of 32155 on SPOT down -7298 points in 4 days...