Bank Nifty Chart Pattern – Downward Projection
Bank nifty double bottom and double top chart pattern (also known as W pattern & M pattern) trade setup on 25th August 2023.
On 24th August, Bank nifty spot closed at 44496 . I posted a short sell trade setup of Banknifty triggered at 44900 on 24th August. In the evening, I mentioned in after market analysis that “buying can only be considered if Bank nifty breaks 44930 level on the upper side. On the downside it has support between 44000-43940 level”. Click on the following link to read the full analysis published 0n 24th August at 09:54 pm – Nifty Fifty Chart Levels.
Bank Nifty Chart Today (25th August)
As expected Bank Nifty opened with a gap down on Friday. After making a high of 44353 it came down to the mentioned support zone of 44000-43940 after 10:30 am. Take a look at the following 3-minutes chart of Bank Nifty spot and see how it reacted around this support zone. It made a nice double bottom formation on the predicted support zone and moved upward to test the earlier days high.
Bank nifty got heavy rejection from its earlier days high of 44353. After 01:00 pm, I identified another double top chart formation on Bank nifty chart. It was not a perfect M pattern though but decided to flow with the present market sentiment and a short sell entry signal triggered at 43260 with a stop loss above its earlier high. I projected a target level of 44050-44000 for this particular short sell trade setup.
Look at the 3-minutes Bank nifty chart, screen captured after the entry signal, based on the double top chart pattern after the rejection from days high.
Price consolidated for a long time in that zone and finally collapsed to lower levels. Bank nifty made a low of 44134 before days closing. Though it didn’t reached to the target zone but from the entry to closing price produced more than 100 points gain in the favor of that particular short sell signal.
On Monday (28th August), if banknifty spot breaks 44360 on the upper side, only then I will be looking for scalping or intraday buy trade setup/s. On the downside, If it breaks 43940 on the downside then will adopt a sell on rise approach based on live chart setup.
What is W pattern and M pattern
W pattern: In technical analysis of financial markets, a “W pattern” refers to a chart pattern that resembles the letter “W”. This pattern is often considered a reversal pattern, indicating a potential shift from a downtrend to an uptrend. It consists of two downward price movements followed by a smaller upward movement, then followed by another downward movement and finally a significant upward movement. The pattern is thought to represent a period of accumulation and subsequent trend reversal.
M pattern: Similar to the “W pattern,” an “M pattern” is a chart pattern commonly used in technical analysis of financial markets. It’s considered a reversal pattern that can indicate a potential shift from an uptrend to a downtrend. The pattern consists of two upward price movements followed by a downward movement, then another upward movement, and finally a significant downward movement. This pattern is thought to represent a period of distribution and a potential trend reversal.
In an upcoming post, I will share in details how to identify these patterns in real time market and how to trade them in accordance with support resistance levels of Nifty, Bank Nifty or any other trading instrument.
If you want to stay updated with Nifty, Bank Nifty and Option trade setup levels and strategies for scalping or day trading, based on pure price action and support resistance levels, then bookmark the following link – Nifty Trading.
You can plot these direction changing support/resistance trading levels on your chart too independently, which will help you to enter and exit the market (Nifty, Bank Nifty or any other trading instrument) at proper time and to stay on the direction, where the big players are sitting. If you have any questions or wish to share your thoughts, don’t hesitate to reach out via email at inversetrades.team@gmail.com.
Disclaimer: This is not a buy/sell recommendation. This post has been made for educational purpose only.
