Contrary to the popular myth of "Sell in May and go", I will present my view on why I say "Buy till Oct 2009 and then sell and go".....
I have analyzed the daily and weekly charts of Nifty Futures, Sensex, S&P500, Hangseng and Shanghai and found the following....
1. On the daily charts of Nifty Fut, we have completed the very short term bearish waves at 4388 while the Sensex have not by only 100 points. It may be noted that Sensex has taken the support at 34 EMA long term moving average, which may also be sufficient....
This 3-day rapid correction, has in the process, made all the mathematical indicators move from a heavily overbought zone to oversold region. This means that even if we consolidate around here for a couple of days, those indicators will regain their strength to move upwards....
2. Considering the weekly charts of Nifty and Sensex, there lies the progressing 6th wave upwards and that too till much higher levels....This wave, in all probability, will complete as it is also moving in the form of a srong progressing "W" pattern....
The targets for this wave are as follows....
Nifty Fut : 5050-5120
Sensex : 18150-18300.
3. The Asian peers like Shanghai and Hangseng are also moving in a similar manner but the rise has not been like that of Indian markets....I feel, Shanghai will continue to lag Nifty but Hangseng might just take up the pace and move towards 26500.
4. Now, the S&P 500 plays one of the major roles here. Remember, the de-coupling theory, as many say, acts only in % terms (ie, rate of rise or fall). Otherwise, all developed or fast developing markets always compliment each other.
The daily charts of S&P500 suggests that there are 2 immediate resistances at 1015 levels (one long term declining resistance and the other very short term inclining resistance. They intersect each other on 12th August and probably it will cross that level then.
There is also another overhead resistance at 1152. But I feel that maybe S&P500 will get its resistance at the 50% retarcement level of the entire bear fall at 1054.
5. The deciding factor : S&P500 has developed a strong bearish wave on weekly charts on a mid-term range starting from March 2009. This wave should take S&P to 878 by 23rd Oct 2009.
These observations lead to the following conclusion....
Nifty and Sensex will continue to move upwards to complete the 6th extended wave (levels defined in point 1&2), which is also the 75% retracement of last year's bear fall. This upwards journey will continue till the 1st week of Oct 2009 after which the bearish effect of S&P 500 will come into picture. That will cause a rapid fall in global markets then till 23rd Oct 2009, which is the target date for S&P.
Obviously, these upmoves wont be an easy one and there might be many ups and downs during the course of the move. Yes, the entire analysis may get violated if we continue to slide below 4350 currently. So watch today's movement and whether we sustain above yesterday's low of 4388 or not.....If we sustain, then the above analysis holds true with higher degree of accuracy...
Happy trading and enjoy the rides.....
I have analyzed the daily and weekly charts of Nifty Futures, Sensex, S&P500, Hangseng and Shanghai and found the following....
1. On the daily charts of Nifty Fut, we have completed the very short term bearish waves at 4388 while the Sensex have not by only 100 points. It may be noted that Sensex has taken the support at 34 EMA long term moving average, which may also be sufficient....
This 3-day rapid correction, has in the process, made all the mathematical indicators move from a heavily overbought zone to oversold region. This means that even if we consolidate around here for a couple of days, those indicators will regain their strength to move upwards....
2. Considering the weekly charts of Nifty and Sensex, there lies the progressing 6th wave upwards and that too till much higher levels....This wave, in all probability, will complete as it is also moving in the form of a srong progressing "W" pattern....
The targets for this wave are as follows....
Nifty Fut : 5050-5120
Sensex : 18150-18300.
3. The Asian peers like Shanghai and Hangseng are also moving in a similar manner but the rise has not been like that of Indian markets....I feel, Shanghai will continue to lag Nifty but Hangseng might just take up the pace and move towards 26500.
4. Now, the S&P 500 plays one of the major roles here. Remember, the de-coupling theory, as many say, acts only in % terms (ie, rate of rise or fall). Otherwise, all developed or fast developing markets always compliment each other.
The daily charts of S&P500 suggests that there are 2 immediate resistances at 1015 levels (one long term declining resistance and the other very short term inclining resistance. They intersect each other on 12th August and probably it will cross that level then.
There is also another overhead resistance at 1152. But I feel that maybe S&P500 will get its resistance at the 50% retarcement level of the entire bear fall at 1054.
5. The deciding factor : S&P500 has developed a strong bearish wave on weekly charts on a mid-term range starting from March 2009. This wave should take S&P to 878 by 23rd Oct 2009.
These observations lead to the following conclusion....
Nifty and Sensex will continue to move upwards to complete the 6th extended wave (levels defined in point 1&2), which is also the 75% retracement of last year's bear fall. This upwards journey will continue till the 1st week of Oct 2009 after which the bearish effect of S&P 500 will come into picture. That will cause a rapid fall in global markets then till 23rd Oct 2009, which is the target date for S&P.
Obviously, these upmoves wont be an easy one and there might be many ups and downs during the course of the move. Yes, the entire analysis may get violated if we continue to slide below 4350 currently. So watch today's movement and whether we sustain above yesterday's low of 4388 or not.....If we sustain, then the above analysis holds true with higher degree of accuracy...
Happy trading and enjoy the rides.....
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