Could the Nifty be heading for a nosedive?

#1
There is a crucial hurdle ahead for the Nifty. The outlook for several stocks seems very bullish, but let's consider for a minute if a sharp reversal could be imminent.

See the chart with some long-term trendlines that mysteriously seem to connect near the same point. Notice the gentle upward-sloping trendline in dark red? That's the line that connects the top of the Feb '00 top of 1818.15 to the Jan '04 top of 2014.65. And guess where we are now? Standing just beneath that line... in fact, we closed a mere 1 point below that line on 24 Dec. See that upward-sloping wedge-like pattern, starting 22 Nov? It looks suspiciously like a terminal. The bearish implications of this pattern have not been negated as yet simply because the break of the 1-3 trendline by wave '5' that occured on Wednesday-Friday is a very common occurance. Couple that with the trading volumes ... a huge jump over the previous days, indicative more of the culmination of a trend than a continuation ... and add THAT to the proximity to the long-term trendline mentioned above, and we might have a dangerous situation!!!

Here are some very interesting Gann time and price relationships. The move from the top on 23 Feb '00 to top on 9 Jan '04 took 1416 days. The move from the top of Jan '04 to 27 Dec '04 will have consumed 353 days, or almost exactly 1416/4 = 354 days, thereby making it an important time for change in trend. The number of days consumed in the move up from the 17 May '04 bottom of 1292.2 is 224 on 27 Dec '04. And, 224/256 = 7/8, where 256 days is the time taken for the bull run of 2003, from April '03 low to Jan '04 top. Also, 224/129 is approx. 7/4, making the time relationships even more forceful, indicating change of trend. What's more, 2065.5 lies on an important Square of Nine relationship with the May '04 bottom of 1292.2, perhaps indicating the end of a move. Also, the index has shown either a major or intermediate top or bottom, around 27-28 Dec of every year (except 1996 and 2003).

The indicators are giving mixed signals. While the 14-day RSI has broken out of a contracting triangle pattern, indicating a major upmove ahead, the MACD, 14-day CCI and CMO are forming multiple bearish divergences. In fact, the MACD has broken below a crucial support line at around 41.

If the terminal is confirmed by a fast break below the 2-4 trendline, the downside target would be at least 1845. On the other hand, if the Nifty survives above 2087, then the minimum I see it going to is 2111 in this particular upmove.
 

Attachments

binzy

New Member
#3
Well, what do u know... another major January top may be in the making....? Quite a violent breakout on the downside for the RSI as well.
 

binzy

New Member
#5
Some startling Market Geometry

Would love to get in touch with other Gannalysts. I am not into astrology and the occult like he was, but his mathematical relationships are fascinating. While Elliott Wavers like Vivek Patil predicted a Sensex target of 6675 (achieved 4 Jan '05) , some Gann relationships also occurred simultaneously. Here are some of them... more than mere co-incidences... :confused:

Points down from 2014.65 top on 9 Jan '04 to 1912.35 top on 23 April '04 = 102.3
Points up from 2014.65 top on 9 Jan '04 to 2120.15 top on 4 Jan '05 = 105.5 or approx. equal

Thereafter, the index saw a violent correction in both instances.

Again, the index has been topping in early January in 2003 and 2004, following an important nearly-365-day cycle, which could be repeated this year. Gann did say that the overriding dates to watch for change in trend are important anniversaries of major tops and bottoms.

Points from 920 bottom on 28 Apr '03 to 2014.65 top on 9 Jan '04 =1094.65
Points from 1292.2 bottom on 17 May '04 to 2120.15 top on 4 Jan '05 = 827.95 = 3/4 * 1094.65 approx

Days from 920 bottom on 28 Apr '03 to 1292.2 bottom on 17 May '04 =385
Days from 1292.2 bottom on 17 May '04 to 2120.15 top on 4 Jan '05 = 232 = 5/3 * 385 approx

It's obvious that an important price-time squaring happened on this day, i.e., the move consumed a multiple of the previous move in terms of price, and also a multiple of the previous move in terms of time.

Days from 1105.6 top on 2 Jan '03 to 920 bottom on 28 April '03 = 116
Days from 1292.2 bottom on 17 May '04 to 2120.15 top on 4 Jan '05 = 232 = 116 * 2

But, sometimes price-time squarings happen in a different way, i.e., the next move in terms of price is a multiple of the last to previous time. Same with time. For example,

Price from 1105.6 top on 2 Jan '03 to 920 bottom on 28 April '03 = 185.6
Price from 920 bottom on 28 Apr '03 to 1292.2 bottom on 17 May '04 = 372.2 = 185.6 * 2

It could also be that the next move in terms of price is a multiple of a previous time, and vice versa. For example,

Price from 2014.65 top on 9 Jan '04 to 1292.2 bottom on 17 May '04 = 722.45
Time from 2014.65 top on 9 Jan '04 to 2120.15 top on 4 Jan '05 = 361 = 722.45 / 2

Another example:

Price from 1292.2 bottom on 17 Mar '04 to 2120.15 top on 4 Jan '05 = 827.95
Time from 920 bottom on 28 Apr '03 to 2120.15 top on 4 Jan '05 = 617 = 3/4 * 827.95 approx

A very interesting fact to note is that the number 2120 lies almost exactly:
300 degrees from 1818.15 top on 23 Feb '00
105 degrees from 2014.65 top on 9 Jan '04, and also 105 degrees from 1292.2 bottom on 17 May '04
120 degrees from 920 bottom on 28 April '03
15 degrees from 1384.94 top on 12 Sep '94
195 degrees from 1205.95 top on 27 Feb '02

All these points lie on important divisions of the 360 degrees of a circle, specially 300 degrees (sextile) and 120 degrees (trine) and the squaring of the degrees from 2014.65 top and 1292.2 bottom.

Time will tell whether the change of trend will persist, or today's meltdown was a one-off thing. Wish Gann was alive to answer that one...! :D
 
#7
Re: Some startling Market Geometry

binzy said:
Would love to get in touch with other Gannalysts. I am not into astrology and the occult like he was, but his mathematical relationships are fascinating. While Elliott Wavers like Vivek Patil predicted a Sensex target of 6675 (achieved 4 Jan '05) , some Gann relationships also occurred simultaneously. Here are some of them... more than mere co-incidences... :confused:

Points down from 2014.65 top on 9 Jan '04 to 1912.35 top on 23 April '04 = 102.3
Points up from 2014.65 top on 9 Jan '04 to 2120.15 top on 4 Jan '05 = 105.5 or approx. equal

Thereafter, the index saw a violent correction in both instances.

Again, the index has been topping in early January in 2003 and 2004, following an important nearly-365-day cycle, which could be repeated this year. Gann did say that the overriding dates to watch for change in trend are important anniversaries of major tops and bottoms.

Points from 920 bottom on 28 Apr '03 to 2014.65 top on 9 Jan '04 =1094.65
Points from 1292.2 bottom on 17 May '04 to 2120.15 top on 4 Jan '05 = 827.95 = 3/4 * 1094.65 approx

Days from 920 bottom on 28 Apr '03 to 1292.2 bottom on 17 May '04 =385
Days from 1292.2 bottom on 17 May '04 to 2120.15 top on 4 Jan '05 = 232 = 5/3 * 385 approx

It's obvious that an important price-time squaring happened on this day, i.e., the move consumed a multiple of the previous move in terms of price, and also a multiple of the previous move in terms of time.

Days from 1105.6 top on 2 Jan '03 to 920 bottom on 28 April '03 = 116
Days from 1292.2 bottom on 17 May '04 to 2120.15 top on 4 Jan '05 = 232 = 116 * 2

But, sometimes price-time squarings happen in a different way, i.e., the next move in terms of price is a multiple of the last to previous time. Same with time. For example,

Price from 1105.6 top on 2 Jan '03 to 920 bottom on 28 April '03 = 185.6
Price from 920 bottom on 28 Apr '03 to 1292.2 bottom on 17 May '04 = 372.2 = 185.6 * 2

It could also be that the next move in terms of price is a multiple of a previous time, and vice versa. For example,

Price from 2014.65 top on 9 Jan '04 to 1292.2 bottom on 17 May '04 = 722.45
Time from 2014.65 top on 9 Jan '04 to 2120.15 top on 4 Jan '05 = 361 = 722.45 / 2

Another example:

Price from 1292.2 bottom on 17 Mar '04 to 2120.15 top on 4 Jan '05 = 827.95
Time from 920 bottom on 28 Apr '03 to 2120.15 top on 4 Jan '05 = 617 = 3/4 * 827.95 approx

A very interesting fact to note is that the number 2120 lies almost exactly:
300 degrees from 1818.15 top on 23 Feb '00
105 degrees from 2014.65 top on 9 Jan '04, and also 105 degrees from 1292.2 bottom on 17 May '04
120 degrees from 920 bottom on 28 April '03
15 degrees from 1384.94 top on 12 Sep '94
195 degrees from 1205.95 top on 27 Feb '02

All these points lie on important divisions of the 360 degrees of a circle, specially 300 degrees (sextile) and 120 degrees (trine) and the squaring of the degrees from 2014.65 top and 1292.2 bottom.

Time will tell whether the change of trend will persist, or today's meltdown was a one-off thing. Wish Gann was alive to answer that one...! :D



tht is some amazing info!

gime ur email.. i got something useful for u ;)
 

binzy

New Member
#9
Re: Some startling Market Geometry

Hi im3vil, I'm 3 curious :) ... [email protected]

An afterthought... I know only the basics of Elliott Wave (other wavers plz enlighten us further) but this much is apparent:

920 bottom in Apr '03 - 2014.65 top in Jan '04 = 8 months of consecutively higher close
2014.65 top in Jan '04 - 1292.2 bottom in May '04 = 5 months (total = 13 months)
1292.2 bottom in May '04 - 2120.15 top in Jan '05 = 8 months (total = 21 months)

All Fibonacci Numbers... probability of major trend reversal is very high. I would book my profits and bail out :eek:
 
Last edited:
#10
Re: Some startling Market Geometry

binzy said:
Hi im3vil, I'm 3 curious :) ... [email protected]

An afterthought... I know only the basics of Elliott Wave (other wavers plz enlighten us further) but this much is apparent:

920 bottom in Apr '03 - 2014.65 top in Jan '04 = 8 months of consecutively higher close
2014.65 top in Jan '04 - 1292.2 bottom in May '04 = 5 months (total = 13 months)
1292.2 bottom in May '04 - 2120.15 top in Jan '05 = 8 months (total = 21 months)

All Fibonacci Numbers... probability of major trend reversal is very high. I would book my profits and bail out :eek:

Ya i noticed it.. even in the past.. there have been such intances. :cool:

 

Similar threads

Intraday Higher Leverage

Save up to 90% in brokerage and get higher leverage for intraday trades.

Name:Phone:
Email:City:
State:
Are you a day trader?