Bank Nifty (NSE) - Irregular Correction - Elliott Wave Analysis - Aug 18th '13

According to Elliott wave principle, if an irregular correction appears then the wave c will be deeply bearish and will make a low which is lower than wave a

This indicates that Bank Nifty will be leading the bearish race and will be more responsible for Nifty drifting further down to 5200 or even 4400 levels

I have outlined charts of all 3 main time frames i.e. daily, weekly and monthly to depict the wave movements in the best possible manner

Monthly chart

As shown below in the chart we see that Bank Nifty has formed an irregular correction with wave b going beyond wave a which signifies that wave c will have a steep downmove.

                                                        Weekly chart

 

      Avoid going long on banking stocks which constitute Bank                                                                Nifty. Don't add banks to your portfolio. Even if you want to                                                           go long from an investment point of view for next 5 years then       this is not the right time as we will see all major banks making       new year's low

                                                       

                                                      

                                                      

 

 Summary

In the next 10 to 12 months time frame, we may see the                                                                 following levels very likely

Axis Bank - may go down to 700 levels and breaking that can get to 500 level

 SBI - may go down to 1100 to 1300 level
ICICI - may go down to 600 to 625 level, dropping that level could                                                       get down to 450 as well
HDFC Bank - may go down to an intermediate level of 510, breaking that can see 400 eventually