Indian Equity market is showing sharp selloff with stocks like Yes Bank, LIC Housing, DLF, Relcap capitulating more than 10%. During such severe selloff it is best to stay in direction of the trend and avoid creating long positions unless a meaningful bottoming formation is in place.
Below is the chart of Bank Nifty that shows the steepness of down move which has broken below its previous important support levels as well.
Bank Nifty hourly chart: Time cycles of 76 hours
Above chart of Bank Nifty shows prices have been moving in downward sloping channel and it broke below the important support levels of 27500 – 27400 which was mentioned in the daily morning research. Post that the selloff was sharp enough and prices moved down strongly.
Time cycles: Above chart shows 76 hours time cycle that captured short term temporary pullback and prices gave away fast after reaching near the mid of the cycle. This time as well post completing wave b near the trendline resistance there was a sharp selloff and it is best to use pullback as shorting opportunities unless the upper blue trendline breaks.
On downside 26600 is next level to watch as long as 27500 remains intact!
Following was mentioned in the morning research report – The Financial Waves short term update
“In short the trend for Bank Nifty seems to be sideways to negative with the immediate resistance placed at 28000. A break below the 27500 level followed by 27400 will resume the down move and will be extremely bearish. We are now at very important juncture which will decide if the next set of selling is starting…”
Get access to “The Financial Waves short term update” along with Intraday calls on stocks, Bank Nifty and Nifty. We recommended short calls via sms or whatsapp on 21st August itself and Nifty achieved target 2 levels in today’s session. You can register under the special Independence day offer which is extended only for a few more days – Register under the offer