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Inter Market Analysis

Inter market analysis is a series of articles studying related segments of the market to identify lead lags between trends in each segment. This can often forewarn you of impending changes in trend and allow for planning of required action based on it. For example midcaps v/s large caps, currencies v/s commodities and US markets v/s European markets and so on. In a global environment inter-market relationships are not restricted to a country but between countries and their respective asset classes as well.

Bank Nifty

On Thursday I published the hourly chart of bank nifty marking wave 5 as i-ii-i-ii which was not complete, but wave 5 did become very extended in that after a 5 wave decline the larger degree marking is ideally 1-2-3 done, and wave 4 up next. The hourly RSI at 15 we should see a short term bounce back to either 38.2% in wave 4 typically to 26000 but as wave 2 was also 38.2% do not rule out an alternation case where wave 4 is 61.8% at 26500, wave 5 down follows then after that. 

bn230918

Bank Nifty

After all the panic yesterday it is possible to mark bank nifty as a 5 wave decline and if the recent lows hold then we mark that as wave A and anticipate wave B. Wave B can have multiple retracements from 27236 [38.2%] to 27680 [61.8%]. The size is an open case it can be small or big we have to see.

banknifty 190918

Amazon

Amazon - forms a wave 4 triangle pattern at the start of the year and the rest of the move is wave 5, that fits a nice rising channel and the lower end of the channel is at 1874. A close below 1874 would be a sign that wave 5 is complete. Amazon was the driver down for the Nasdaq yesterday and is on close watch.

amazon 180918

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