Technical Analysis on Nifty

Bye bye bear

Can we say that the bottom formation has taken place in the stock market?

As far as I'm concern I still feel not yet.

Going by the history its too early to say the bottom, yet I feel 12500 seems to be a very important support which has been held in the present carnage of the market. So market in a short term has definitely seen a bottom, but it has still to go more which makes me feel that the pain is not yet over.

Levels of 10000 to 8800 on Sensex can be possible in medium to intermediate term.

Reasons for it:

When does a Bear market end's?

1. When there is a great deal of fear, cash with funds is at record levels?
2. Has retail investors developed an easy new game - shorting?
3. Has the main line media have finally discovered that we are in a bear market and are they repeatedly and extensively covering it?

If the answer to the above comes to you as YES then definitely we can say we are out of the bear market. But unfortunately I am getting these answers as NO.

Some previous bear hugs:

Boom bust of 1991-93

[img=http://img228.imageshack.us/img228/9356/sensex1992yv9.th.gif]

From the peak of 4546 in early April 1992, went down to 1980, in april 1993.

The market there after went under consolidation phase and only after nov 98 the market once again rallied from 2742 to reach 6150 in mar 2000 and then Dot Com bubble bursts and the sensex dropped to hit a low of 2596. This bear swipe took 58% off the peak and lasted for almost 20 months.

[img=http://img228.imageshack.us/img228/9135/sensex2001fw0.th.gif]

Real Estate bust, this time the market has hit the peak of 21207 in jan 2008 and rest is yet to follow. No body knows what is hidden in the future? Will this double bottom formation marks the end of this bear phase or not? History suggests NO. It is not necessary that indices will go down again to make fresh lows and will take longer time to go on a fresh uptrend, but I feel it pays off well to remember history in time like these. As future is nothing but replica of past.


[img=http://img228.imageshack.us/img228/1695/sensex2008hj2.th.gif]

Yellow and purple lines are optimistic moves if 12500 level holds and no fresh bad news comes in then such a possibility can takes place in such situation.

Nice colorful charts mate.

Hi.. very nice explaination !!!!!!!!!1
i am having 3000share of Nagarjuna Fertilisers @41, can you guide me when it will touch 40's... or it will fall belo 30...

Cheers
PS

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Today only it hit 30/- and went dwn to close @29.85/-, presently it is in consolidated zone so better be away frm this stck, markets sentiments r weak and don't see any rally tht can make it to go above 40, but in some relief rally u can see the stock might touch around 38 or so odd levels. Odds r in favour of pulling the stck down to hit 27/- any close below 27/- gives it a traget of 22/- wch seems to me much favorable in present mrkt conditions.

[img=http://img262.imageshack.us/img262/2605/nagarjuname1.th.gif]

extremely good work raj
renu

With the Head and Shoulder formation in the sensex charts, suggest me the weakness and two targets level is quoted in the chart with possible frame of time, wch can vary within a week's time-frame, rest everyone will see. As far as my knowledge foes mrkt do-not like uncertainities and presently with a time frame of one yr in mind there are only uncertainities to follow and nothing else,whether in the form of BAILOUT PLAN of US banks, india's forthcoming election, political party coming in power. These all will take some shape in the technical-charts to show and the rest will then be history.

http://img258.imageshack.us/img258/2...1500oppqe0.png

Thanks for the info

I thnk when I hav written this THREAD, the mrkt was seeing a good rebound rally and on TV and news channels were starting to claim the Jul dip as the bottom formation, but not historically not technically neither fundamentally I was able to convince myself for bottoming process. So I thought to share with u all about my thoughts with u all, and its gr8 to see tht u all r abl to benefit urself with my thoughts. A saying to share with u all
"A seed while growing makes no sound ...
A tree while falling makes huge noise ...
Destruction SHOUTS and the creation is always QUIET.
This is the power of silence."
While reading replace "Seed and Tree" with Market.

On Simple trendline terms Nifty is showing support at 3800-3750 levels, then the next support comes at around 3600-3550 levels which may not be so easy to break.

Another view on the basis of trendline study...

[IMG=http://img521.imageshack.us/img521/6213/niftyne0wi6.png]