Banknifty - Analysis for 30th Dec'24

1. Elliott Wave Analysis

• Identify potential impulsive (5-wave) or corrective (3-wave) patterns:
  • The steep fall in the middle suggests a Wave 3 downtrend (impulse wave).
  • A subsequent recovery and consolidation near the center indicate a corrective Wave 4.
  • The chart's final consolidation might represent the beginning of a new trend.

2. Fibonacci Levels

• Measure Fibonacci retracements from the highest point (near 51800) to the lowest point of the decline:
  • Key retracement levels:
    • 38.2%: ~51450 (initial resistance during the recovery).
    • 50%: ~51550 (strong resistance if prices retrace further).
    • 61.8%: ~51680 (a major breakout point for further upward movement).
• Extensions can be applied for targets:
  • 127.2% and 161.8% from the current corrective low.

3. Gann Angle

• Use key support points (such as 51200) and observe price action to align angles.
  • A break above 51400 suggests bullish momentum.
  • Immediate support lies at 51200, with stronger support below at 51000.

4. Pivot Points

• Calculate intraday pivot points:
  • Pivot (P): (High + Low + Close) / 3 = ~51400
  • Resistance levels:
    • R1: ~51550
    • R2: ~51680
  • Support levels:
    • S1: ~51250
    • S2: ~51100

5. Trendlines

• Downward trendline: Connect the major highs of the decline.
  • Breakout occurs if prices cross 51400-51450.
• Horizontal support: Forming at 51200, indicating accumulation.

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Possible Strategy:

1. Entry:

• Bullish Entry: Above 51400 (break of resistance and consolidation above pivot).
• Bearish Entry: Below 51200 (break of support).

2. Target:

• Bullish targets:
  • T1: 51550 (R1).
  • T2: 51680 (R2, major resistance).
• Bearish targets:
  • T1: 51150 (S2).
  • T2: 51000 (strong support).

3. Stop Loss:

• Bullish stop loss: 51300 (below support trendline).
• Bearish stop loss: 51350 (above resistance trendline).

4. Risk-Reward Ratio:

• Aim for at least 1:2 or 1:3 (e.g., risk of 50 points with potential reward of 100-150 points).