Will history repeat and Nifty touch 4965 !!!

In the backdrop of nifty making new yearly high despite of the unfavorable global market trends, I tried to revisit some of the TA principles and while doing so, I found that the Indian market is at the peak and Fibonacci retracement suggest a good 10% correction from current level.

Have a look at the following.

08/19/2009 - 10/20/2009: 4353.45 to 5181.95
76.4% retracement of this upmove is 4548.98

10/20/2009 11/03/2009: 5181.95 to 4538.5
As expected Nifty down till 4538.5
Deviation is 0.23%

10/20/2009 - 11/03/2009: 5181.95 to 4538.5
123.6% retracement of this down move is 5333.8

11/03/2009 - 01/06/2010: 4538.5 to 5310.85
As expected Nifty up till 5310.85
Deviation is -0.43%

11/03/2009 - 01/06/2010: 4538.5 to 5310.85
76.4% retracement of this upmove is 4720.77

01/06/2010 - 02/08/2010: 5310.85 to 4675.4
As expected Nifty down till 4675.4
Deviation is 0.96

01/06/2010 - 02/08/2010: 5310.85 to 4675.4
123.6% retracement of this down move is 5460.82

02/08/2010 - 04/07/2010: 4675.4 to 5399.65
As expected Nifty up till 5399.65
Deviation is -1.12

02/08/2010 - 04/07/2010: 4675.4 to 5399.65
76.4% retracement of this upmove is 4846.32

04/07/2010 - 05/25/2010: 5399.65 - 4786.45
As expected Nifty down till 4786.45
Deviation is 1.24

04/07/2010 - 05/25/2010: 5399.65 to 4786.45
123.6% retracement of this down move is 5544.37

05/25/2010 - 08/20/2010: 4786.45 to 5546.6
As expected Nifty up till 5546.6
Deviation is 0.04

What
Will
Happen
Now
Will history repeat !!!!


05/25/2010 - 08/20/2010: 4786.45 to 5546.6
76.4% retracement of this upmove is 4965.85

Deviation of 1% will give us some buffer till 5600. But considering the fact that the trendline joining highs of 01/06/2010 and 04/07/2010 is at 5540.40 and the dead cat bounce on 02/04/2008 is 5545.2, combined with extremely low VIX forming a perfect Doji in the weekly chart along with the present unfavorable global market conditions it seems retracement is highly probable.

Food for thought !!!!

Regards
Sesha

First target 23.6% at 5370

Ksesha,

Excellent work !!

This is the type of research which will take you a long way. Keep it up !

Tc

Hi Sesha,

I am not a followers of Fibonacci, nevertheless I appreciate your effort.

Actually I had no idea that it was Fibonacci, I observed that over the last one year every upmove in Nifty is followed by a fall of 76.4% and every downmove is followed by a raise of 123.6% . This was recurring for the last 4 cycles.

When I tried to find the significance of these numbers, came to know that these are Fibonacci numbers.

Appreciate a lot if any senior throw some light on the relevance of these numbers to the stock market.

Quite impressive work Ksesha!!!!

I m not follower of neither Fib nor Nifty. However, I do believe in identifying this type of symmetry and I have seen them working.

I m not trading in Nifty so no position there but yester was stop loss day for me. My banks trades hit trailing stop loss and some other hit initial entry stop loss so I am almost having no positions. Now I m just afraid and hope that market don’t run away quickly in coming days coz many times we get panic attack like this and then run away. How much I wish your analogy happens to be very true!!! Amen....

No offense towards others position. I m just being lil selfish here....

Bests,
Apurv

Never felt so confident, so became bold and greedy and filled in the gaps and written few calls with break even at 5570. if not all hoping for a 50% return on premium.

SEP 5600CA - 1 lot
SEP 5500CA - 1 lot
SEP 5400CA - 1 lot
SEP 5300CA - 1 lot
SEP 5200CA - 2 lot

OCT 5600CA - 1 lot
OCT 5500CA - 1 lot
OCT 5400CA - 1 lot
OCT 5300CA - 1 lot
OCT 5200CA - 1 lot
OCT 5100CA - 1 lot
OCT 5000CA - 2 lot

Going is good so far.

Regards
Sesha

Good thread! though I think different waves. Anyway our directions are the same.

I have done similar research in a different way from March 2009 to the peak a correction of 23.2% on Fib occurs it is similar levels because u are measuring peak and trough I am taking the peak of the bull market will the bottom of the bear market and get similar results.