The old post from me....a strong basis of which was Trend lines!!!!
That was a time when every Tom, Dick and Harry was talking of a new low and giving targets of 2200-----1900----1500 and even 900 on Nifty. !!
See chart.
AP
----- Original Message -----
From: Abhijit
Sent: Friday, March 27, 2009 7:10 PM
Subject: [Technical-Investor] Nifty long term
A longish post from me.......
Attached are 2 charts with comments.
Firstly, I strongly believe the low of 2252 will NOT be broken, see chart attached.
Secondly...........
Bulls seem to be saying ENOUGH IS ENOUGH!! We can no longer take this lying down. After all, everyone would like to believe that by the year 2020, India will be a superpower. If you are one of those who has this belief, then read on..........
The simple logic is that the stock market is the barometer of the economy of any country. The S & P index of USA made a double top in 2009 as also the FTSE of England. These were the first signs that the economy of those countries (supposedly the BIG 2 of the world) had topped out. Yes, economies had topped out !!
The S & P made an all time high of 1552.87 in 2000, and another high of 1576.09 in 2007, YES, 2007!! US economy toped out in 2007.
The FTSE made a high of 6950 in 1999, 6930 in 2000 and 6754 in 2007.
All technical analysts will agree that double tops or double bottoms have more meaning when there is a big time gap in these extremes. There was a 7 year gap betwen the double tops OF USA and England.
Let us see what our markets did in this period.
The BSE Sensex made a top of 6150 in 2000 and after 7 years (Jan 2008), not only crossed this,but made a top which was 3 TIMES the top of 2000 - above 21200!!!
In spite of all this, there has been tremendous gloom and doom over the last 16 months, where every rise has been an opportunity to sell and go short.
WHY I FEEL THIS RISE IS HERE TO STAY............TILL WE SEE 3700 - 3750.
What is so great about this target - 3700 - 3750??
Reason no. 1:
The fall from the Nifty top at 6357 to the bottom 2252 has been retraced only 23.6%, when it rose to 3240 in November 2008.
It needs to rise to 38.2%....which is around 3800.
Reason no. 2:
It is also normal for any bear market to test the 200 weekly MA, which is....3750.
Reason no. 3:
A close above 3020 causes a breakout from a triangle which has a height of 700 odd points.
A breakout above 3020 gives a target of...you guessed it right, no rocket science here.......3700 - 3750.
Cheers,
AP
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