IS THIS BEGINING OF NEW BULL MARKET ?

1)Due to the positive global cues nifty posted weekly gain of  6.15%, & most important thing is that it closed above the resistance line at 5170-5200, which is previously acting as support line. Thus after breaking down the descending triangle on 12/8/11 (weekly closing basis), nifty is back in the triangle.

CHART 1 : NIFTY BACK IN TRIANGLE

So the descending triangle break out which is discussed here http://kolhapuritrader.blogspot.com/2011/08/follow-up-nifty-in-triangle-and.html may turn out to be false breakdown.

2) It has been said that bull market is alive above 200 SMA, while bear market is alive below 200 SMA. Now just look the 2 interesting charts.

CHART 2 : 200 SMA WEEKLY CHART

CHART 3 : 200 SMA DAILY CHART

It is seen that nifty is above the 200 sma in weekly chart ( for 1 week i.e. week ending on 26/8/11 it closed below 200 sma but from next week it closed above 200 sma ), that means it is bull market ( uptrend) in weekly time frame. However nifty is below the 200 sma in daily chart, that means it is in bear market (down trend ) in daily time frame. THIS MUST BE THE TECHNICAL REASON WHY NIFTY TRADED WITHIN THE RANGE ( 4700 -5200) FOR 11 WEEKS, WHATEVER MAY BE LOCAL / GLOBAL FUNDAMENTAL REASONS.

3) NIFTY made double bottom as shown in the chart below, and broken the resistance line. DOUBLE BOTTOM is bullish pattern.

CHART 4 : DOUBLE BOTTOM

4) As seen in chart 5 nifty broken the 500 point range within which it is trading for 11 weeks, so now it should target 5200 + 500 = 5700.

CHART 5 : NIFTY OUT OF RANGE

5) SO INFERENCE IS THIS MAY BE BEGINNING OF NEW BULL MARKET. FOR THIS UPTREND TO CONTINUE FOLLOWING ARE PREREQUISITES : -
       A) It should start trading above 200 sma on daily chart.
       B) It should start trading above the resistance line of descending triangle which is shown in chart 1.
       C) The previous resistance at 5170-5200 should now act as support for any dip.
       D) AND LAST BUT MOST IMPORTANT THAT IN ANY DIP IT SHOULD HOLD ( SHOULD   NOT BREAK) 4700 LEVEL.
       IF IT BREAKS BELOW 4700 THIS WHOLE VIEW WILL GET NEGATED AND THERE WILL BE SEVERE FALL.

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