ICICI Bank - Target 1275 +

Oct 23, 2023

Stock is in the most powerful wave of its lifetime, minuette 3, of minor 3, of primary 3 of Cycle 3!

All the previous waves, of this cycle 3 (primary 2, minor 2), have been defying all the fib retracement levels so far by big margin. 200 daily EMA at 925 and anchored VWAP at 924 is showing good support.

Will write more detailed analysis later, I am going long big time on this!

NB - I am also enthused by phenomenal results declared for Q2FY24, not because of numbers, but because of structural marked improvements in core business, low unprovisioned writeoffs, and focus on retail which is the key driver for NBFCs/banks post corona. As an insitution, it has always been having good quality employees.

Detailed writeup during weekend.

Oct 25, 2023

Note

Breached 924.75, should target 907 and 902. I will Keep buying on dips. Weekly 50 EMA at 924 may prevent down target of 902 and 877.

Minuette 1 retraced fully, so ongoing is still minor 2. Though zigzag has achieved its target, with no abnormality, the retracement is normal and indicates steady flow.

Historically, quarterly S1 / S2 breakdown resulted in sizeable rally afterwards. Curenly flirting with this level.

All analysts given targets of 1100+ (23 Oct 23).

Nov 2, 2023

Note

Currently the stock is in ending diagonal of minor wave 2(c)(5)(c)(ii and iv equally convincing). it should seek one/two more impulsive waves down, with target of 902 / 877, unless upthrust begins early.

Post this, a powerful upward thrust, as seen after an ending diagonal, with first target of 962 should happen.

If looking to go long, maybe accumulating at dips could be a better strategy. We have to remember that diagonals seldom fail to achieve wave 5 of itself, and we are in wave 2/4 of this diagonal, so a downward impulse is more probable.

Nov 2, 2023

Note

typo correction - read wave labelling as 2.c.(5).(ii or iv)

Nov 3, 2023

Note

Today's advance wasn't expected. If it were to continue to be wave 4 of diagonal, there was no need for today's wave to trespass the territory of wave 1, which it had already done. Typically, the speed, vol etc. in wave 4 of diagonal is lethargic, but today's advance is leaving open a question - it this an extremely rare case of a failed diagonal and a bullish impulse has begun?

Am not sure at the moment, will have to wait for some time for formation to become clear as to where it is heading.

Nov 18, 2023

Note

Yesterday's closing at 921.85 is below the high of Rs. 931 achieved on 31.10.23, which means that the current upswing with peak of Rs. 950.45 is not wave 3 of the impulse (if that was a failed diagonal). As such, the ending diagonal theory remains.

The peak of 950.45 marks end of wave 4 of ending diagonal with satisfactory three wave pattern. Hence, the current fall off this peak, is making final wave 5 of the ending diagonal with a target of 890, which should go with heavy volumes and maybe with exhaustion gaps. Post this, a sharp retracement back up should be expected, to travel the whole distance again back to peak of atleast 997. This level also means breaching the Fib band of -2.618 suggesting recovery as observed in past. Further, MACD line appears to be ready to cut signal line from top, algos may be triggered to open short positions, supporting downwards fall.

The entire movement, in the form of ending diagonal speaks of upward bias, for the following reasons:

1) Wave 3 is just 85.4% of wave 1, ideal ratio was atleast 1 if not 1.618
2) Wave 3 was retraced 85.4% by wave 4, though a 50% was adequate.
3) Wave 4 revisited the territory of wave 1, which twice visit is not generally seen.
4) Volumes during wave 2 and 4 were fairly well maintained, as compared to wave 1 & 3, generally a thinner volume was expected.
5) Retracement of wave A by B, is more than 61.8%, indicating upward bias. This was also the starting point of diagonal.
6) Wave 2 of diagonal indicated ordinary movement, i.e. the diagonal should have formed with adequate length, but wave 4 behaviour suggests that ordinary movement is interrupted by upward bias.

Above reasons, make me reach a conclusion that underlying forces are bullish and retracement below 889 has very low delta.

I continue to hold longs, will accumulate more at 889 levels. If it falls beyond that level, then the exposure would move from my trading book to investment book with a horizon of 1-2 years. The fundamentals remain solid to my understanding and yesterday's move of RBI to increase risk weight for unsecured loans, would in medium term, if not immediately, benefit banks more than it would hurt. It would be NBFCs which would be hurt more than banks.

I would be glad to hear views / suggestions/ corrections from community on this.

NB : I continue to remain unconvinced on the theory of current correction after end of leading diagonal of primary wave 1, my estimates / conclusion of wave numbering remain valid to me.

Nov 22, 2023

Trade active

Final wave 2.C.5.c.(5) downward has started and currently wave 3 of this downward impulse is in progress, with overall target of 889. This would be the culmination of corrective movement once 889 has been achieved. I am waiting to accumulate more at 890 level.

Dec 4, 2023

Trade active

Stock has touched the high probability retracement zone, it should retrace 38.2% (or maybe 61.8% hereafter, not clear which one should it be).