Banknifty - Analysis - Weekly Chart

Analysis

1. Identifying Support and Resistance Levels

• Support Levels:

  • 48,000: Immediate support zone, as it aligns with a prior swing low.
  • 46,500: Key support from the previous consolidation in early 2023.
  • 45,000: Long-term support zone from 2022.

• Resistance Levels:

  • 49,800: Immediate resistance from a prior swing high.
  • 51,000–51,200: Significant resistance, aligning with a recent peak in 2024.
  • 52,500: Major resistance from the multi-year high.

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2. Elliott Wave Theory

• Wave Structure:

  • The chart appears to be completing a corrective wave (Wave 4), indicating that an impulsive Wave 5 could follow.
  • If the downtrend continues, we may see an extended corrective phase (Wave C), targeting 46,500 or lower.

• Key Levels:

  • Wave 5 target (uptrend continuation): Above 52,000, potentially testing 55,000 (prior highs).
  • Wave C target (downtrend continuation): Below 47,000, extending to 45,000.

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3. Fibonacci Ratios

• Fibonacci Retracement:

  • Drawn from the 2022 low (~36,000) to the 2024 high (~55,000):
    • 38.2% retracement: ~48,000 (current support zone).
    • 50% retracement: ~45,500.
    • 61.8% retracement: ~43,000.

• Fibonacci Extensions (if downtrend extends):

  • 1.272 (~46,000) and 1.618 (~43,500).

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4. Gann Angles

• Support Zones:

  • Gann angles suggest strong support near 46,500.
  • A break below this level could lead to sharp declines toward 45,000.

• Resistance Zones:

  • Dynamic resistance is visible near 49,800 and 51,000.

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5. Pivot Points

• Pivot Point Calculation:
  • Weekly Pivot: ~48,500.
  • Resistance (R1): ~49,800; (R2): ~51,000.
  • Support (S1): ~47,000; (S2): ~46,000.

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6. Trendlines

• Downtrend:
  • A clear downward-sloping trendline can be drawn from the recent highs (~55,000) to ~49,000.
  • A breakout above 49,800 would confirm a trend reversal.
• Long-term Trendline:
  • The uptrend from 2021 lows (~30,000) intersects near 46,500–47,000, a crucial support zone.

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Trading Strategy

Bullish Scenario (Trend Reversal):

• Entry: Above 49,800 (confirmation of a breakout above resistance).
• Target 1: 51,000 (key resistance zone).
• Target 2: 52,500 (multi-year high zone).
• Stop Loss: Below 48,500 (immediate support).

Bearish Scenario (Continuation of Downtrend):

• Entry: Below 47,000 (breakdown of current support).
• Target 1: 46,000 (Fibonacci extension).
• Target 2: 45,000 (long-term support).
• Stop Loss: Above 48,000 (recent support).

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Tips for Execution

1. Confluence Zones: Look for levels where Fibonacci, pivot points, and trendlines align.
2. Volume Analysis: Ensure volume confirms the breakout or breakdown.
3. Risk-Reward Ratio: Maintain a minimum 1:2 risk-reward ratio for trades.
4. Confirmation: Use indicators like RSI or MACD to confirm oversold or overbought conditions before entry.

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