On 16 Jan we
have posted a post on blog labeled “WILL IT REPEAT THE SHOW?” Please see this link if u has not seen (http://www.kolhapuritrader.blogspot.com/2012/01/will-it-repeat-show.html ).
At the start
of year 2011 there may be very few people who are seeing possibility of down
trend in Indian stock market, but year 2011 ended with almost 25% correction in
major indices and many stocks hammered by more than 50%.
Now the year
2012 started with lot of noise with downside possibility and nifty may go down
to 4400, 4000 and even we may see much lower levels. Obviously nobody is ready
to put money in stock market in anticipation that getting stocks at much more
lower levels. But market always moves against mass psychology so that it will
create psychological pain to maximum people. Now nifty is up 9.18% from Dec.11
closing value. So let’s try to find out what is next possibility?
In stock
market lot of patterns as well as numbers is important and which keeps
repeating. U should be able to identify these patterns / numbers which may be
possible by learning, learning and learning.
Just see the
interesting thing happening right now in Indian stock market. Because of which
once again the question (WILL IT REPEAT THE SHOW?) is coming to our mind. And looks like this
time if it repeats it will repeat in longer time frame ( months to years ) and
not for 1-2 days.
All charts
are of NIFTY.
CHART 1
Chart 2
Chart 3
Chart 4
As shown in
chart 1 NIFTY started down move from week ending on 11/1/08 and completed it in
42 weeks i.e. week ending on 31/10/08. After that as shown in chart 3 it
consolidated for 22 weeks (from week ending on 24/10/08 to week ending on
27/3/09)actually it consolidated for 21 weeks ( exactly half of the 42 weeks )
and started up move since 22’nd week.
NOTE: -
Consolidation means sideways movement during which smart players ( read
institutional investors ) are accumulating or distributing stocks slowly, in
this case it is accumulation.
Now see what
happened next -----
CHART 5:
22 WEEK
ONWARD THE INDIAN STOCK MARKET RALLIED AS SHOWN IN ABOVE CHART.
Now look
chart 2 the ongoing down move started from week ending on 12/11/10 which may
have completed in 42 weeks i.e. week ending on 26/8/11. After that as shown in
CHART 4 it started consolidation from week ending on 2/9/11 which may have
completed last week exactly after 21 weeks i.e. week ended on 20/1/12. And
from this week onwards (week ending on 27/1/12) it
may start its upward journey. FOR THIS COMING FRIDAY NIFTY SHOULD CLOSE ABOVE 5100.
That means
for last 21 weeks nifty (Indian stock market) consolidated after falling for 42
weeks and now this week (22’nd week) if it closes above 5100 there is high
probability (80%) that it will once again repeat the story as shown in chart 5.
ONE MORE
REASONS WHY THIS WILL HAPPEN -----
In post posted on
18/12/11 see link (http://www.kolhapuritrader.blogspot.com/2011/12/bear-attack.html)
it has been mentioned that---
