Where is the NSE Nifty 50 headed?
- Thread starter Traderji
- Start date
Mystery, thy name is Nifty!
Here is an amateur analysis of the prevailing Nifty chart. According to Gann cycles and various technical indicators, the Nifty seems poised for a very strong bull move ahead. The contention is that:
1) The rise from the 29 Sept low of 1695.7 to the high of 11 October at 1829.45 took 9 trading days against the fall from the 11 Oct high, which has so far consumed 12 trading days, and we are nowhere near the 29 Sept bottom. Further, both weekly and daily charts show low volumes on fall and higher volumes on a rise, suggesting more upsides to come. All signs of accumulation are present.
2) See the attached chart with MACD Histogram, 14-day RSI and 14-day CCI, which all show reverse bullish divergences, suggesting hidden strength preceding a strong upmove.
3) This might seem far-fetched, but take a look at the structural similarities between the bull run that started from the low of 920 on 28 April 2003, and the move which began on 24 June 2004. Specifically, take a look at the circled areas on the chart.
- Both moves seem to be defined by expanding channel lines as shown
- Both moves seem to have formed reverse bullish divergences as seen by the indicators in the chart
- Using Gann cycle turnings, see that
(1) Among many other such price-time relationships, the low on 24 June this year occurred 14 months from the low at 920 on 28 April 2003, when the price was 920+(14*37) = 1438.
(2) There are similar cycle turnings on 22 September, 26 October and 29 October. The upward move from 29 Oct 2003 is akin to the upward move on 29 Sept 2004. There was an intermediate top on 6 Nov 2004, leading us to believe the next cycle turning is near that date in 2004. Also, historically, the index bottoms out around the end of October at least on even years.
(3) Using Gann's rules, the next turning date should be approx 256*2/3 (calendar time from 28 April 2003 bottom to 9 Jan 2004 top) or 129*4/3 (calendar time from 9 Jan 2004 top to 17 May 2004 bottom) = 171 days after the low on 17 May, giving us a date on 4 Nov. Gann considered the midpoint between the September Equinox and December Solstice to be very important for a change of trend, hence again we arrive at around 4 Nov. This day also completes 300 days from the Jan 2004 top at 2014.65, which is 5/6 of a year, important for a change in trend. Besides, the number 553 lies on a very important Gann angle when analysing cycle turnings, and 553 days from the 920 low on 28 April 2003 is on 1 Nov.
These bullish contentions are valid only as long as the index does not break the lower upward-sloping channel line on high volumes. A break of the channel line will most likely be an indication to go short.
For now, watch the break of the top downward-sloping blue channel line of the expanding formation. Once you get an entry signal from your favorite moving average or indicator, it's time to go long and ride the next wave.
Here is an amateur analysis of the prevailing Nifty chart. According to Gann cycles and various technical indicators, the Nifty seems poised for a very strong bull move ahead. The contention is that:
1) The rise from the 29 Sept low of 1695.7 to the high of 11 October at 1829.45 took 9 trading days against the fall from the 11 Oct high, which has so far consumed 12 trading days, and we are nowhere near the 29 Sept bottom. Further, both weekly and daily charts show low volumes on fall and higher volumes on a rise, suggesting more upsides to come. All signs of accumulation are present.
2) See the attached chart with MACD Histogram, 14-day RSI and 14-day CCI, which all show reverse bullish divergences, suggesting hidden strength preceding a strong upmove.
3) This might seem far-fetched, but take a look at the structural similarities between the bull run that started from the low of 920 on 28 April 2003, and the move which began on 24 June 2004. Specifically, take a look at the circled areas on the chart.
- Both moves seem to be defined by expanding channel lines as shown
- Both moves seem to have formed reverse bullish divergences as seen by the indicators in the chart
- Using Gann cycle turnings, see that
(1) Among many other such price-time relationships, the low on 24 June this year occurred 14 months from the low at 920 on 28 April 2003, when the price was 920+(14*37) = 1438.
(2) There are similar cycle turnings on 22 September, 26 October and 29 October. The upward move from 29 Oct 2003 is akin to the upward move on 29 Sept 2004. There was an intermediate top on 6 Nov 2004, leading us to believe the next cycle turning is near that date in 2004. Also, historically, the index bottoms out around the end of October at least on even years.
(3) Using Gann's rules, the next turning date should be approx 256*2/3 (calendar time from 28 April 2003 bottom to 9 Jan 2004 top) or 129*4/3 (calendar time from 9 Jan 2004 top to 17 May 2004 bottom) = 171 days after the low on 17 May, giving us a date on 4 Nov. Gann considered the midpoint between the September Equinox and December Solstice to be very important for a change of trend, hence again we arrive at around 4 Nov. This day also completes 300 days from the Jan 2004 top at 2014.65, which is 5/6 of a year, important for a change in trend. Besides, the number 553 lies on a very important Gann angle when analysing cycle turnings, and 553 days from the 920 low on 28 April 2003 is on 1 Nov.
These bullish contentions are valid only as long as the index does not break the lower upward-sloping channel line on high volumes. A break of the channel line will most likely be an indication to go short.
For now, watch the break of the top downward-sloping blue channel line of the expanding formation. Once you get an entry signal from your favorite moving average or indicator, it's time to go long and ride the next wave.
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