BankNifty -Target Done, ED Done, Fall Done,Bounce, What’s Next?

WaveTalks Market Update - Budget Day Breakdown (Feb 1, 2025)

The much-anticipated Budget 2025 has failed to cheer the markets, triggering a sharp sell-off that aligns perfectly with a classic Ending Diagonal (ED) breakdown.

Technical Setup - ED Play in Action!

For those following the Elliott Wave roadmap, the Ending Diagonal (ED), also known as a Rising Wedge, unfolded in the last Wave 5 of a larger degree impulse that began from the lows of 47844 on January 27, 2025, culminating at the psychological resistance of 50000 today on the Budget day 1st Feb 2025.

This pattern typically marks trend exhaustion, leading to swift and often dramatic reversals. The market exceeded our prior target of 49650+ before peaking at 50000, and today, we are seeing exactly the expected reaction.

Last Bank Nifty Idea - Target 49650+

If you spotted this pattern and managed risk effectively, you are likely riding this sharp decline from the highs of 50000 & Booking Profits close to 48968 key level highlighted in the last idea


Magical Support - Intraday 49000

After a sharp 1000-point fall, the market found support at a key level of 48968, highlighted in the last idea. A strong 500-point bounce once again, pushing towards same target of 49650+.

Breakdown Details:

- Key support level: 48968
- Actual low: 48925 post completion of the Ending Diagonal
- Initial fall: 1000 points
- Current recovery: 500 points approx.

This reversal from key support confirms the significance of the Ending Diagonal breakdown, followed by profit booking and an intraday bounce. Watching the next wave structure will be crucial for further moves.

But here’s the big question:

How Much Fall?

That’s for your financial analyst to answer, but history suggests that ED (Ending Diagonal) or Rising Wedge breakdowns often erase a large portion of prior gains in a relatively short time. Today’s action is a reminder—markets don't forgive complacency.

You witnessed the dramatic 1000+ point fall from 50000 to 49000 (approx.) in a single day post the ED pattern & bounce - all cheers! to the pattern


Fundamental Backdrop - Budget Disappoints Street Expectations

While the government introduced personal income tax cuts aimed at boosting consumption, the markets responded with caution rather than optimism. Several factors weighed on investor sentiment:

- Profit booking after a four-session rally ahead of the budget
- Economic Survey 2024-25 highlighted concerns about a potential market correction, particularly impacting retail investors who may not have seen significant downturns before

This confluence of technical exhaustion and lukewarm fundamental sentiment led to today’s sell-off.


✅ Key Takeaways & Next Steps

- 50000 top confirmed as ED completion
- Sharp downside expected as structure breaks down
- Fundamental triggers amplify selling pressure
- Profit-taking and caution dominate post-budget moves

The reversal is here. The next critical question is: Which wave unfolds next? Will it extend into a deeper corrective structure, or is there a potential counter-trend bounce? Identifying the next logical buying or selling zone will depend on how the upcoming wave develops within the larger Elliott Wave framework.

Stay sharp, stay prepared, and catch me later in another exciting update from WaveTalks – Market Whispers! Can you hear them?🔥

Regards,
WaveTalks
Abhishek