Using Bollinger Bands® along with Elliott wave for breakout confirmation

bollinger bands elliott wave trading Oct 05, 2020

HDFC has been in gaining streak since past seven consecutive sessions. Elliott wave combined with indicators such as Bollinger band which helps in identifying the breakout levels on upside.

Below research will ensure how to use bands for capturing the areas of breakouts and Elliott wave understanding in terms of complex correction.

The stock was covered in the morning daily research report – The Financial Waves short term update

HDFC Ltd 60 mins chart: (Anticipated as on 5th October 2020 morning 9am)

HDFC Ltd 60 mins chart: (Happened as on now)

Wave Analysis:

HDFC gained for the fifth consecutive day and ended the session with big bullish candle near 1790.65 levels.

On the daily chart, Prices moved in higher high and higher low pattern this is a signal of greater confidence and a possible trend for further higher prices. HDFC has also closed above its 50 day exponential moving average which signals bullish sentiment. Currently wave 4 is unfolding in corrective manner wherein wave (b) seems to be moving in well channelized manner as we can see prices have bounced off from channel support in the form of complex correction.

As shown on hourly chart, Prices had given breakouts of its upper Bollinger band and closed near around it which is a sign of bullishness for the coming session as long as middle Bollinger is intact on downside. RSI indicator moved above 70 levels hence the possibility of a minor consolidation cannot be ruled out which can be used as buying opportunity. Within wave (b) we are seeing wave z (red) is unfolding now.

In short, trend for HDFC seem to be positive as of now. A break above 1800 can take price towards 1854 or higher levels as long as 1740 remain intact on downside

Happened: The stock moved exactly as mentioned Bollinger Bands gave bullish breakout signal. In the today’s session the stock was up by more the 7% and made an intraday high near 1905 levels which was ever higher then fore mentioned levels. This analysis ensures that Elliott wave patterns combined with indicators can help in gauging the directional moves.

Following were calls given on intraday Equity Futures on 5th October 2020:

• Call given at 10.01 am- BHARTIARTL FUT BUY ABOVE 432.75 SL 430.85 TGT1 434.3 TGT2 435.75

o Target achieved at 10.23 am BHARTIARTL FUT BUY CALL GIVEN TGT1 ACHIEVED AT 434.2
o Target achieved at 10.42 am BHARTIARTL FUT BUY CALL GIVEN TGT2 ACHIEVED AT 435.75

• Call given at 10.05 am- DLF FUT BUY ABOVE 159.5 SL 158.4 TGT1 160.4 TGT2 161.2

o Target achieved at 10.16 am DLF FUT BUY CALL GIVEN TGT1 ACHIEVED AT 160.4
o Target achieved at 10.19 am DLF FUT BUY CALL GIVEN TGT2 ACHIEVED AT 161.2

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