Tuesday, April 23, 2013

Banknifty, SBIN, ICICIBank - Technical Update

  1. Looking at the monthly chart of Banknifty, one cannot help but notice a rising wedge formation.
  2. Whatever the implications of such a pattern (no need to discuss it here, most technical analysts know it very well), we first need this pattern to complete.
  3. And to complete this pattern we may need to test the top trend line of this pattern, anywhere in the neighborhood of 16000, on the Banknifty.
  1. ICICBank shares similar traits, evident from the charts.
  2. One quite revealing observation would be the volume, which is next to dismal, and quite fitting to the characteristics of a rising wedge.
  1. SBIN is not displaying a clear rising wedge formation. But the approximate triangle formation near the bottom of the channel with a nearly horizontal top channel line, is suggesting a supply zone developing.
  2. Should prices take out that area of supply, we may see a sharp surge in the prices showed by dark blue line.
  3. Volume again is declining with occasional spurts of interests. 
So we might have some good days ahead of us, should the prices in the above counters follow what we have dared to see. I have not cluttered the post with many charts, but I feel my readers will get the point. This is a possibility I have discussed, any contrasting views are welcome. With so much going on all around the world, its easy to miss an important clue, so your views and comments are welcome.


  1. hello sir,
    according to my count, bank nifty is in a complex correction pattern starting from 2008. Between 2008-2012, bank nifty has completed running flat correction of the type A-B-C. Between 2012-2013, bank nifty has completed wave X and now it should be wave Y to atleast 8000. Similarly, i am counting ICICI Bank in a symmetrical triangle correction originating from 2008 till date. ICICI Bank could correct towards 900 or lower.

    1. Nice observation. I just pointed out a possibility. EWP gives us a framework for comparing the actual price action and then trade accordingly at low risk opportunities. It is better used to find low risk entry points with "specific points of ruin" as Jeffery Kennedy of EWI would put it, than as a forecasting tool. For Banknifty and ICICIbank to reach your targets they will have to travel approx 4500 and 250 points. And that journey is what will make money for us, so I feel whereevr these counters go, we should use EWP to position ourselves in the direction of the "path of least resistance" as Jesse Livermore would put it.
      Thanks for your comment.

    2. yes sir, there can be any number of possibilities but that is the best part about EWP. BTW i think there is something wrong with your ICICI Bank. The charts that i use shows all three tops at almost same level


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