Bank Nifty:Bow-Tie Diametric pattern nearing it's completion
#Characteristics of Bow-Tie Diametric pattern
*It's a seven legged Elliot / Neo wave corrective pattern
*Wave A=G,B=F,C=E.wave D is connector.
*Wave B takes less time then wave A took to form,and can correct wave A by more then 61.8%.
#Reasons for not considering this entire swing as an impulse/triangle move
*Wave B has retraced wave A more then 61.8%(In an impulse as per Neo wave , wave 2 does not retrace wave 1 by more then 61.8%)
*Wave B took less time then wave A took to form.(In an impulse as per Neo wave , wave 2 takes more time then wave 1 took to form)
*Wave C has not extended wave A by 161.8%.(In an impulse as per Neo wave ,either wave 3 or wave 5 extend's wave 1 by 161.8%)
*Wave D enter's wave A territory.(Here it doesn't)
#Findings/Analysis of this pattern
*currently we are in 5th leg of this 7 leg's pattern.Price wise pattern has achieved wave E has achieved it's 100% extention target of wave C,hence going forward we can expect a downward movement of price in the form of wave F till 35900(100% extention target of wave B).Post wave F we can expect another move on the upside in the form of wave G(final leg of the pattern) which can take price in between 36850-37400,post which we can expect price to drop till 34250-350 depending upon where wave G ends as per post pattern implication of Diametric pattern.
#Possible Action that can be taken as a trader as per current scenario.
*One should start exiting long's in part's if not fully exiting there long's.
*Should wait for wave G to complete post which one can go short on the faster retracement of wave F's low.
PS:Price path discribed here is an ideal path discribed in books as per Neo wave .Reality can defer.
Disclaimer:Trade should not be taken solely on the basis of this analysis.Posting this just for my future reference.
*It's a seven legged Elliot / Neo wave corrective pattern
*Wave A=G,B=F,C=E.wave D is connector.
*Wave B takes less time then wave A took to form,and can correct wave A by more then 61.8%.
#Reasons for not considering this entire swing as an impulse/triangle move
*Wave B has retraced wave A more then 61.8%(In an impulse as per Neo wave , wave 2 does not retrace wave 1 by more then 61.8%)
*Wave B took less time then wave A took to form.(In an impulse as per Neo wave , wave 2 takes more time then wave 1 took to form)
*Wave C has not extended wave A by 161.8%.(In an impulse as per Neo wave ,either wave 3 or wave 5 extend's wave 1 by 161.8%)
*Wave D enter's wave A territory.(Here it doesn't)
#Findings/Analysis of this pattern
*currently we are in 5th leg of this 7 leg's pattern.Price wise pattern has achieved wave E has achieved it's 100% extention target of wave C,hence going forward we can expect a downward movement of price in the form of wave F till 35900(100% extention target of wave B).Post wave F we can expect another move on the upside in the form of wave G(final leg of the pattern) which can take price in between 36850-37400,post which we can expect price to drop till 34250-350 depending upon where wave G ends as per post pattern implication of Diametric pattern.
#Possible Action that can be taken as a trader as per current scenario.
*One should start exiting long's in part's if not fully exiting there long's.
*Should wait for wave G to complete post which one can go short on the faster retracement of wave F's low.
PS:Price path discribed here is an ideal path discribed in books as per Neo wave .Reality can defer.
Disclaimer:Trade should not be taken solely on the basis of this analysis.Posting this just for my future reference.
Penafian
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