BankNifty Price Forecast and Potential Reversal in Sub-wave 4 with Upside Targets

Banknifty Time Frame 30 min

In this article, we will delve into a comprehensive BankNifty Price Forecast, analyzing the current market conditions and potential future movements

In our analysis of BankNifty, we observe that it is currently moving within a downside channel. The current wave structure indicates that we are in sub-wave 4 of wave (5). Sub-wave 4 is a corrective wave characterized by a zigzag pattern, referred to as wave ABC. Typically, this corrective wave corrects to a minimum of 38% Fibonacci retracement, which is at 44,839, and a maximum of 61.8% Fibonacci retracement, which is at 44,335.

The progress of sub-wave 4 correction in BankNifty

BankNifty is currently undergoing a corrective phase in the form of sub-wave 4. It has already reached a low of 44,562, suggesting that sub-wave 4 has completed the required minimum correction of 38% Fibonacci level. However, it’s worth mentioning that the correction could potentially extend further to the maximum retracement level of 61.8% Fibonacci, which stands at 44,335.

Recent Price Decline and BankNifty Price Forecast

In recent times, there has been a noticeable decline in the price of BankNifty, with a drop from its peak at 45,655 to 44,562.40 (-2.39%). However, adhering to the wave principle, there is still a potential upward movement yet to unfold, which holds the possibility of reaching a target of 46,000. Traders can leverage the reverse Fibonacci levels of the previous sub-wave (3) to (4) as reference points to establish targets following the breakout of the corrective channel. These targets encompass the levels of 45,200, 45,655, and 46,000.

Significance of Corrective Channel Breakout

It is crucial to recognize that the validity of this setup is contingent upon the breakout of the corrective channel, which is delineated from wave (3) to wave (4). Corrective movements typically lack robust strength; hence, it is ideal for the price to remain within the boundaries of the channel. Only an impulsive wave possesses the capacity to breach the confines of the corrective channel.

BankNifty Volume Profile and Immediate Resistance at POC Level

The volume profile analysis of BankNifty reveals that the Power of Control (POC) level is near 45,200. POC represents a significant level of price concentration and acts as immediate resistance in the current market scenario. To gain control over the bears, the bulls will need to overcome this level.

The POC level serves as a battleground between the buyers and sellers. If the bulls manage to surpass this resistance level, it would indicate a shift in market sentiment and provide them with greater control over the price action.

Key Observations and Levels to Consider

Here are some key observations and levels to consider in the BankNifty analysis:

  • Impulsive (5)th wave in progress with sub 1-2-3-4-5 waves. Currently, sub-wave 4 is in progress.
  • BankNifty previously closed at the 44,639.45 level.
  • Sub Wave 1: Started from 43,345, ended at 44,042 (approximately 700 points rally).
  • Sub Wave 2: From 44,042 to 43,520 (approximately 500 points retracement).
  • Powerful sub Wave 3: Started from 43,520, reached 45,655 (approximately 2,100+ points rally).
  • Current 4th sub-wave achieved the minimum target of 38% Fibonacci retracement near 44,845 (approximately 810 points).
  • The maximum 4th sub-wave retracement can be up to the 61.8% Fibonacci level near 44,335 (major support).
  • 200 SMA support near 44,540 and 61.8% support near 44335
  • Upside resistance zone 43,900-43,980 as channel top confluence with 38% Fibonacci retracement and 50 EMA.
  • Corrective waves are time-consuming.
  • BankNifty volume profile suggests POC level near 45,200 acts as immediate resistance.

Conclusion

In conclusion, the analysis of BankNifty indicates that it is currently in sub-wave 4 of wave (5) within a downside channel. The completion of the minimum required correction suggests the potential for a reversal from either the 38% or 61.8% Fibonacci retracement levels. Traders can set upside targets after the breakout of the corrective channel, with potential targets at 45,200, 45,655, and 46,000. It is important to closely monitor the price action and confirm the breakout before considering trading decisions.

We will provide further updates on this in Live market

Risk Management:

  • Trading in financial markets involves inherent risks, and caution should be exercised.
  • Traders should conduct thorough analysis, set stop

Disclaimer: The information presented in this article is for educational and informational purposes only. It should not be considered as financial or investment advice. Trading in the financial markets carries risks, and individuals should seek professional guidance and conduct their own research before making any investment decisions. The author and the platform assume no responsibility for any financial losses or damages incurred as a result of following the information provided in this article.

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