Nifty long term view

[Ajay.Joglekar]

I will use this thread for a long term view and tracking of Nifty from a technical perspective. It is very easy to get lost in the day to day analysis of Nifty's ups and downs and forget the big picture in that process.

But the picture is always and really always the important and most significant picture from various perspectives including our personal well being.

I will start off with a view of Nifty that I had posted long back on Nov 11th on Prashanth's Yahoo! Technical-Investor Group http://finance.groups.yahoo.com/group/Technical-Investor/.

There in I said for the long term view ( exact words ) :

"
Long term trendlines of nifty

I see that currently we are flirting with a Support
Resistance band. If we break this band we are more or less "dead".

"
And the chart that I attached is as seen below.

http://img17.imageshack.us/img17/8687/niftylongterm20081117.th.png (http://img17.imageshack.us/my.php?image=niftylongterm20081117.png)

I will post my current analysis in the next post and i will continue to update this thread from here on every week as the action progresses.

[Ajay.Joglekar]

So ... lets see what has happened in the past 3 months.

Nifty is hovering around those support levels but does not go beyond the Fibonacci level of ~2970. This level is the 38% level of the entire rise from 850 started in Sept 2001 to the Dec 2007 peak of 6360.

These are bad bearings for our market. One thing to note is that we are in a classical bear market now that we have retraced back more than 50% of our gains made in the bull market. It took 75 months of bull market but it has taken only 12-13 months to given back around 62% of those gains. This is standard
bear market action.

So then why am i bullish? I am slightly more bullish right now than bearish because i think given the amount of lethargy in the market and the sideways action we are bound to break out somewhere sooner or later.

And the law of averages tells me it will be most probably to the upside. We are highly oversold on long term charts and bound for a short term rally. This rally when it comes will last for some months and may take the levels of 50% retracement out with it quite possibly, but that is also bear action. The major bear will fool the average investor with these sudden rallys.

So be careful to play. In the longer term ( 1-3 years ) i am bearish.

Attaching two charts.

Chart A: The fibonacci levels.

http://img410.imageshack.us/img410/1091/niftylongtermfibonacci.th.png (http://img410.imageshack.us/my.php?image=niftylongtermfibonacci.png)

Chart B : The current situation with one of the current short term resistances as the 38% Fibonacci level.

http://img410.imageshack.us/img410/8540/niftylongterm20090226.th.png (http://img410.imageshack.us/my.php?image=niftylongterm20090226.png)

I will be using the Fibonacci chart as a reference in future posts so keep it bookmarked.

Meanwhile, enjoy life and the markets.

Goodbye for now.
-Ajay

[DTM]

I agree with your analysis and one must be very carefull while taking positions and should always take into consideration the long term view in the mind as that is the basic view which will affect all the superficial views

Good !

[Ajay.Joglekar]

So ... lets see what has happened in the past 3 months.

Nifty is hovering around those support levels but does not go beyond the Fibonacci level of ~2970. This level is the 38% level of the entire rise from 850 started in Sept 2001 to the Dec 2007 peak of 6360.

These are bad bearings for our market. One thing to note is that we are in a classical bear market now that we have retraced back more than 50% of our gains made in the bull market. It took 75 months of bull market but it has taken only 12-13 months to given back around 62% of those gains. This is standard
bear market action.

So then why am i bullish? I am slightly more bullish right now than bearish because i think given the amount of lethargy in the market and the sideways action we are bound to break out somewhere sooner or later.

And the law of averages tells me it will be most probably to the upside. We are highly oversold on long term charts and bound for a short term rally. This rally when it comes will last for some months and may take the levels of 50% retracement out with it quite possibly, but that is also bear action. The major bear will fool the average investor with these sudden rallys.

So be careful to play. In the longer term ( 1-3 years ) i am bearish.

Attaching two charts.

Chart A: The fibonacci levels.

http://img410.imageshack.us/img410/1091/niftylongtermfibonacci.th.png (http://img410.imageshack.us/my.php?image=niftylongtermfibonacci.png)

Chart B : The current situation with one of the current short term resistances as the 38% Fibonacci level.

http://img410.imageshack.us/img410/8540/niftylongterm20090226.th.png (http://img410.imageshack.us/my.php?image=niftylongterm20090226.png)

I will be using the Fibonacci chart as a reference in future posts so keep it bookmarked.

Meanwhile, enjoy life and the markets.

Goodbye for now.
-Ajay

Here comes the rally. Play carefully.

-Ajay

[Ajay.Joglekar]

I had said some few weeks back that we were going to see a rally. It came and now i see on my charts that there will be sideways movement and correction. But as of now i dont see this rally really becoming wholly bearish.

I will update this analysis with charts. Please excuse but due to busy schedule i am not able to post a chart.