In many of my previous posts, I had mentioned that the BIG GAP created after the election result date ie 16th May 2009 will never be filled.....I had also told some of my fellow traders on 10th July, 2009 Friday that the lows of Monday, ie 13th July, 2009 would be the final bottom in our markets for many years to come....
In fact, I had spoken of the start of Bull Market at 3300 Nifty levels itself when global fund managers were talking of newer bottom (One can refer to the previous articles)
Now the question is why the GAP wont be filled?
Lets understand the reason behind such a theory.....
Please refer to the powerpoint presentation below....
http://www.4shared.com/file/121772488/e3eb365f/GAPS_in_Sensex.html
Now, always remember that GAPS can always exist when that occurs in a charted territory. A charted territory is a territory where even a single trade has occurred in the past (ideally in the previous 1-3 months). GAPS when created in an uncharted territory (refer to slide 4), will always get filled since the price has not been traded before. For example, there is no unfilled GAP between 2004 and 2007 (See slide 4).....Whereas, refer to slide 2&3, one will find that the GAP left in Sensex in June 1993 was never ever filled again till today, since that price was already traded before......
Now coming to the present scenario.....
The zone before election was mostly dominated by bears over the last 15 months before the event...Even the upmove from March 2009 lows to that on the election result day, ie 16th May 2009 was rather with an unconvincing participation from majority of the world fund houses....
But the zone created after 16th May saw the end of all bears who were in the previous zone.....Many got perished due to the double circuit while others who were sitting on cash simply found themselves on a different planet all of a sudden.....Thus the intermediate zone was created between bulls and bears (refer to slide 5). This zone demarcates an emotion of confidence in the Indian Market......
Still we will found many people talking of this GAP filling which included many world known analysts. But again their hopes were dashed when Nifty returned from 3900 or Sensex from 13200, a region in between the GAP.....I had spoken of this phenomenon just after the event and today I am publishing the reasons behind my theory.....
Also, one can refer to this GAP as "Continent Reversal" (a term heard from one of my friend and I really loved it).....Why I say 'Continent'? Because, in 2 continents are always separated by a water mass or ocean.....Similarly, the BIG GAP (found in daily, weekly, monthly) charts is separated by a zone of confidence.....The GAP separates people of 2 different emotions completey and forever.....
Happy reading and happy trading !!!
In fact, I had spoken of the start of Bull Market at 3300 Nifty levels itself when global fund managers were talking of newer bottom (One can refer to the previous articles)
Now the question is why the GAP wont be filled?
Lets understand the reason behind such a theory.....
Please refer to the powerpoint presentation below....
http://www.4shared.com/file/121772488/e3eb365f/GAPS_in_Sensex.html
Now, always remember that GAPS can always exist when that occurs in a charted territory. A charted territory is a territory where even a single trade has occurred in the past (ideally in the previous 1-3 months). GAPS when created in an uncharted territory (refer to slide 4), will always get filled since the price has not been traded before. For example, there is no unfilled GAP between 2004 and 2007 (See slide 4).....Whereas, refer to slide 2&3, one will find that the GAP left in Sensex in June 1993 was never ever filled again till today, since that price was already traded before......
Now coming to the present scenario.....
The zone before election was mostly dominated by bears over the last 15 months before the event...Even the upmove from March 2009 lows to that on the election result day, ie 16th May 2009 was rather with an unconvincing participation from majority of the world fund houses....
But the zone created after 16th May saw the end of all bears who were in the previous zone.....Many got perished due to the double circuit while others who were sitting on cash simply found themselves on a different planet all of a sudden.....Thus the intermediate zone was created between bulls and bears (refer to slide 5). This zone demarcates an emotion of confidence in the Indian Market......
Still we will found many people talking of this GAP filling which included many world known analysts. But again their hopes were dashed when Nifty returned from 3900 or Sensex from 13200, a region in between the GAP.....I had spoken of this phenomenon just after the event and today I am publishing the reasons behind my theory.....
Also, one can refer to this GAP as "Continent Reversal" (a term heard from one of my friend and I really loved it).....Why I say 'Continent'? Because, in 2 continents are always separated by a water mass or ocean.....Similarly, the BIG GAP (found in daily, weekly, monthly) charts is separated by a zone of confidence.....The GAP separates people of 2 different emotions completey and forever.....
Happy reading and happy trading !!!
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