BankNifty or the Jungli Billi as named by @ap_pune on Twitter – is at a precarious position.
Attached is the Hourly Spot chart below. We can see a fractal or a repeating pattern but in mirror format with the last upmove and the 1st downmove each of 5 waves (of whatever limited wave knowledge I have – says reversal of trend unless crossed).
BankNifty is now on the edge of the table and if 18000 spot is taken, then, as @assortz coined the phrase, it’s gonna fall off the table.
BankNifty, on this chart is not tradeable on options at all. I would advise all options lovers to just ignore this medium/long term chart, as we can never time the moves. Yes, if one wants, one can go short around the top of the rectangle with a 18800 spot stop for less risky ppl and 19200 spot stop for aggressive/higher risk taking capacity people with a flip to long if stopped or keep rolling short position on moving lower.
View the chart in a bigger format by clicking here or on the chart itself.
The Nifty too has a somewhat same kind of formation and if it follows that – I personally am scared to think as to what would happen to individual stock prices.
Lets see how this plays out. Especially with a lot of data coming out – esp the Fed Rate Hike issue, Demonetisation effects of Indian Currency (from Jan 2017), Budget 2017 (1st Feb 2017) and many unforseen events inbetween, etc.
Disclaimer: I am not a Research Analyst and not registered with any regulating authority. All posts are for educational purpose only.