These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.Take a close look at the chart. First of all, point 1 and 2 are at a lesser steeper angle when compared to the earlier trend. Next, take a look at point 4, which is supporting a rising trendline. Point 3 has violated the down sloping trend line. Point 5 is higher than point 4.
This can mean one of two things. Either the market is preparing to be bullish. Or this is a relief rally for the fall of the last six and a half months. If the market corrects downwards from here, and takes support around the 3950~4050 levels, then we are preparing to have a new bull move.
If however, the market does not pause here, then it would mean that this is just a relief rally, and bulls may get trapped at higher levels.
Let us analyse the other aspects one by one.
This chart is used to measure time cycles based on the moon phases. It has been noticed that a count of 12 usually brings about a change in trend, as can be seen from the chart. Can this time also bring about a change? The probability is high.
Now, a measure of price. The Price has been bouncing about various Fibonacci levels, and possibly this could be the end of this bear move. The 100% level of around 14570 on the BSE of the previous bottoms is a crucial test. This could be easily surpassed, given the mood of the moment.In any case, the bottom recorded in mid July is a very important level, and long trades could be initiated using that as a stop. Please keep in mind, that there would be concerted selling at higher levels, suggesting bulls may be trapped, therefore, extreme caution is suggested at higher levels.
Trade happy after planning your trade.
I am attaching the various charts of the tradable indices which should allow a trader to judge what levels to decide for (him)herself depending on their comfort levels.
The Bank Nifty seems to be ready to assume the mantle of leadership for the Index once again. This large move up can be discounted as a relief rally to the bear phase. For such an extended move, it is prudent to expect a correction.The chart shows the Future pushing through the recent resistances. It also can be seen that they have been offering support too.
The increase in volumes also suggests conviction in this up move.
Therefore, dips may be utilised to buy, retaining the stop at ~4700 levels.
The Nifty Future also is pushing through the resistances, while receiving support after pushing through.
The same strategy could be used. Buying on dips may be profitable.
And finally, the Nifty itself.
After a long time, we see a convincing more back into positive territory. The volumes are slightly higher than average. We see quite a few positive volume bars in this last week up move.
This encourages us to take long positions on dips.Further, the chart also shows us that the last bottom is not accompanied by stronger negative sentiment. Another plus point for the bullish case.
