Federal Bank: Wave 4 Triangle Near Completion, Wave 5 Ahead

Oct 7

After a clean five-wave impulse from the 2020 low near ₹35.70 to the 2024 peak at ₹220, Federal Bank appears to be transitioning into a larger corrective phase.

Weekly Outlook

• The broader structure suggests the start of a 5-3-5 zigzag correction, marked as A–B–C.
  
• Wave A is still unfolding — only Wave 4 of A appears complete, with Wave 5 expected next to finish the first leg of the correction.
  
• Once Wave 5 concludes, price could rebound toward the lower channel trendline to form Wave B, a counter-trend rally within the broader correction.
  
• Thereafter, a deeper Wave C decline may follow, potentially stretching into the ₹149–₹128 zone, which aligns with the 0.382–0.5 Fibonacci retracement range of the 2020–2024 advance.
  

This developing structure reflects a natural pause after a long impulse cycle, with the market now transitioning into a corrective rhythm.


Daily Chart Details
Zooming in, the internal structure of Wave A shows a clear five-wave drop, with Wave (4) evolving as a contracting triangle pattern.

• The MA50 has started curling toward the MA200, hinting at a possible bearish crossover — a classical confirmation of trend transition.
  
• If price breaks below the triangle base, Wave (5) could extend toward ₹186–₹178, derived from Wave 1 projected from Wave 4’s end.
  
• The targets will be adjusted once the final (e)-wave of the triangle is confirmed, as a minor uptick remains possible.
  

A sustained move above ₹206.39 would invalidate the immediate bearish setup and delay the decline.

Conclusion:
Federal Bank’s structure aligns with a typical post-impulse correction, and the interplay between Elliott Wave and moving averages provides a clear framework to track this phase.

Disclaimer:
This analysis is for educational purposes only and does not constitute investment advice. Please do your own research (DYOR) before making any trading decisions.

4 days ago

Trade closed: stop reached