CNX--NIFTY
If you keenly observe the monthly and yearly chart you would find
that nifty has been moving in time cycle of 6--8 years from 2001 as far as
major tops are concerned and time period of 9-1/2 &13-1.2 months for making
major bottoms.
It made its first major bottom at 849.95 on 21.9.2001 and then
major top at 6357.10 on 8.1.2008, it took 75 months and 13 days in this
process, thereafter it fell and made major bottom at 2252.75 on 27.10.2008 it
took 9-1/2 months to make this bottom and the fall was 4104.35 points or
64.56%.
After making major bottom of 2252.75 on 27.10.2008 it moved up and
made major top of 6338.50 on 5.11.2010, it took 24 months and 8 days in the
process but since it could not cross the previous major top of 6357.10
therefore major times cycle count was not disturbed and continued unabated from
27.10.2008.
After making the top of 6338.50 on 5.11.2010 it went down again
and made bottom at 4531.15 on 20.12.2011, it took 13-1/2 months to make this
bottom and the fall was 1807.35 points or 28.51%, thereafter it started moving
up again and made top at 9119.20 on 4.3.2015. Please note that when it made
this top all the ingredients were present for the ultimate top .on that day it
opened up with a huge up gap at 9109.15 and made new all time high of 9119.20
and then went down sharply and penetrated the previous day’s low and made a low
of 8893.95 and closed the day at 8922.65 below the previous day’s low of
8925.55, it was a perfect copy book key reversal. Furthermore it behaved the
way it should have after topping out by steadily moving down. Now coming back
to time cycle please note that the major up move which started on 27.10.2008
from the bottom of 2252.75 has ended with the top of 9119.20 made on 4-3-2015
because this process took 76 months and 7 days and the earlier major top also
took almost similar time therefore it seems that it has topped out for good for
at least few months.
OBSERVATION BASED ON ABOVE
FACTS
1. It fell by 64.56% and 28.51% respectively from the major top of
6357.10 & 6338.50 to make major bottom, so now even if it falls by least of
the two percentage i.e. 28.51 then it could come down to 6520(28.51% of
9119.20).If moderate percentage of 20-25% fall is taken even then it could come
down to 7295 & 6840 level.
2. Time wise it took 9-1/2 & 13-1/2 months to make the major
bottoms, so if least of the two time period is taken then it should have taken
9-1/2 months to make major bottom but since 9-1/2 months elapsed in December-2015
and we are just 200 points away from last year’s low of 7539.50, therefore it
seems that this may not be the major bottom. Had it been a major bottom it
would not have been languishing and coming near to it time and again. So, now
possibly it could make bottom in 13-1/2 time period or more, if it is so then
it is expected to make bottom any time between Jan--May-2016.
3. Retracement points drawn from the top & bottom of 9119.20
& 4531.15 respectively are at 8036/7366/ 6825/ 6283 & 5613, it would be
normal if it retrace up-to 7366 --6825 level. But going down below 6825 and
sustain could trigger fresh fall.
4. Last but not the least market crashed every eighth year
starting from 1992, 2000 and then 2008 .We are in 2016 now so is the crash is
going to happen again? It seems so because all the ingredients for crash are
present, there is euphoria in small and madcap shares and values have reached
astronomical levels defying fundamentals in most of the cases, furthermore most
of the Nifty constituent stocks are terribly placed on the long term charts and
could see unbelievable lower levels in coming weeks/months which is concerning
and looks scary.
It is therefore suggested to do your own research and solid home
work before picking the stocks, buy stocks of only fundamentally good companies
which are available at reasonable valuation. Please avoid buying or chasing
stocks on market rumors. It is advised to adopt staggered buying strategy on
panic down days. But it seems that time is still not ripe to start investment
buying now.
I would like to mention here that the above observation are based
on facts and figures but chart has to be viewed daily for change in technical
parameter such as moving average placements, negative or positive crossovers,
negative or positive divergence and scores of other technical parameters and
any significant positive or negative change should not be ignored. Market moves
should be watched carefully because it is supreme and “MARKET IS NEVER WRONG BUT OPINIONS ARE”.
Disclaimer:-The view expressed here are solely of the author and
he is not at all responsible in any way for the outcome of the trade you enter
based on the above view.
I humbly request all my readers to post their comments on the
above observation.
Contact me for strategic guidance to enter and exit the trade.
By:- N.K.SURANA
AFC Financial Services Pvt
Ltd
P-15, Bentinck Street
KOLKATA-700001
Email:-suranank@gmail.com
Phone:- 03322362411/1990/4558---- Cell:- +91 9831313654 /
8697847721
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