Bottom Line: Sensex reached near 18000 in 15 days exactly as we were anticipating! Time Cycles cannot be more accurate than this…
Sensex Daily chart: Anticipated on 14th October 2011
Happened:
Sensex: Time Cycles:
We mentioned previously on 14th October, “Everything is so systematic that it cannot be controlled or manipulated but humans by default exhibits this natural phenomenon and makes prices move within channel, following 15 days rally, that retraces 76.4% of fall, with each down leg having 3 waves, and each 3rd wave forming positive divergences!!!
If the same systematic approach continues the current rally is only in its 6th day with approximately 9 more days to go and current up leg should also retrace 76.4% of previous down leg taking it near 18000 to 18300 levels which is also the upper end of the channel, 23.6% level of retracement level of entire rally since bottom of October 2008 (now act as resistance) and resistance line coming in from November 2009 lows (shown on 1st chart). All these precisely converge together at 18000 – 18300 levels and this should be touched on 26th October ( +/- 3 days).” Simply PERFECT!!!
On 26th October, Indian equity markets were open for only 1.15 hour on account of Muharat trading and 27th October was holiday. So ideally 28th October becomes likely date for 18000 levels and index opened with a huge gap of almost 400 points that day making a high of 17908. This is in perfect sync with the symmetry we have observed.
It is now imperative to observe how Sensex reacts from current levels. A sideways consolidation forming a rounding type pattern has been seen during previous tops near the downward sloping trendline and so we can expect a similar sideways consolidation near 17900 – 18300 levels before the down leg starts!
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Thanks for the analysis, as said in the original post, I bought calls and the same have also more than doubled, however i havent sold them on friday in anticipation of ~18300 bse and 5450 nifty level, they have decreased to an extent (still in good profit).
ReplyDeleteWhat is your view, another 100 points on nifty possible this week or market will consolidate here?
I am not asking only technical view but also your personal view given my position
A smart trader always analyse the trend and not the exact levels. You will never get precise levels. My above blog clearly states I am expecting some consolidation here but you need to analyse your exit strategies and trade accordingly...
ReplyDeleteThank you Ashish for your constant guidance. I once asked you about, is this human behaviour really works. Ya, it is amazingly really true.
ReplyDeleteOne guidance, I use MACD for identifying trend, taking hint from the higher time frame. I use 40,50,20 setup to clear-up the noises. Macd for nifty is bullish, so thats mean buy at oversold in lower timeframe. But every one is taking a bearish stance, this creates confusion. Can you please guide on using MACD properly and religiously. Thanks and Regards
Hi Sandeep, Thanks for appreciation!
ReplyDeletePlease understand MACD uses moving average which is a lagging indicator. Also your time frame for MACD is bigger which will be used to capture bigger trends and not smaller moves. Pls follow your own strategy and not what others are doing or saying. If you want to capture smaller time frame moves reduce the indicator values and try using it on shorter time frames like hourly charts...
Thanks for your suggestion, I had planned the trade entry well, however could not exit at the highest point, still got good profit in this position trade. As you said exit is always hard, next time i will plan better my exit.
ReplyDeleteThanks
Excellent Call Sir. Hats Off To YOU.
ReplyDeleteThanks a ton, Ashish. I will keep coming to you for clarifications.
ReplyDeleteRegrads