BankNifty-Is this a wedge ? at 47700's (Intermarket Divergence)Disclaimer:
This is not financial advice. Consult your financial advisor before making any decisions.
Falling Wedge Pattern & Its Impact on Markets
A falling wedge is a bullish reversal pattern that signals a potential trend reversal or continuation depending on the context.
What is a Falling Wedge?
Shape: A downward-sloping, converging price pattern where both highs and lows form lower highs & lower lows.
Volume: Declining during the formation, followed by a breakout with increased volume.
Breakout Direction:
Typically upside.
Impact of a Falling Wedge
In a downtrend (reversal pattern) → bullish reversal signal
- Occurs after a downtrend.
- Signals a potential breakout to the upside.
- Traders look for price closing above resistance with higher volume.
Nifty Holds, BankNifty Slips – Intermarket Divergence in Play
Possible Wave 4 and Wave 5 expected to complete in the next few days. Nifty holding its recent low of 21965 while BankNifty makes a new low could be a classic case of intermarket divergence. Will this divergence lead to a reversal or further breakdown?
What is Intermarket Divergence?
Intermarket divergence occurs when two highly correlated markets or indices (Nifty & BankNifty in current scenario) move in opposite directions, indicating potential market shifts, trend reversals, or underlying weakness/strength.
BankNifty on 3rd March 2025
Nifty on 4th March 2025
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BankNifty is forming a falling wedge near 47700 lows, signaling a potential breakout ahead. Is a sharp reversal on the cards? Stay tuned for the next move.
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Regards,
Abhishek
WaveTalks
