India Nifty: Nifty if we look from the past trend the formation has been repeating and the move was according to the past move. Looking the fall from the point a of 6240 to point b at 5725 the retracement of a-b has seen by 76.4% testing 6206 level where point c was seen. There after the fall was seen, this was 161.8% expansion of a-b from point c testing point d at 5173 level. After testing the level of 5173 reversal in price was seen and point e was seen at 5968 which as 76.4% retracement of d-e similar formation of previous fall a-b and rise to point c. after completing the retracement of 76.4% at point e selling was confirm and tested the lower level point f at 5182 which was previous bottom point d, just forming the double bottom formation confirm the short reversal. After reverting from point f the rise was similar to previous one which retraced by 76.4% of e – f where point g at 5750 was confirmed to get top out and reversal in the price was seen. Looking at the past performance the market has retraced by 161.8% expansion after the retracement by 74.6%, which states that 161.8% expansion of e-f from point g which need to test the level of 4536 where point h has been seen. But some consolidation was seen before testing the target where 4700 was the support taken twice reverted from the support level but was not sharp enough and after testing the level of 4536 point h which confirm the expected move reversal in price was seen and has moved shapely where the retirement as seen by 76.4% of g-h where the expected move is seem to get exhaust from where the reversal can be expected. Today we have seen the market has tested the level of 5450 level which is exactly coming to 76.4% retracement of g-h and is confirming the point i at 5448 and reversal in price can be expected from here.
As we have been looking the fall which is seen by 161.8% in the past, and on the same basis if we calculated the further move with expansion of g – h from i which bring the lower target of 3500 level in medium term. On the fall to reach the lower target there will be short pull back at various support levels with profit booking on the way to test the target. Further on the long term chart dating from 2004 bottom 1240 and 2009 bottom at 2500, taking the trend line which is also showing market need to give a correction and the level again comes at 3500 which is 161.8% expansion of the last formation and the time frame is getting decided where the bottom is expected by December 2012 or max by February 2013. Following in the long term chart explaining the bottom to situation and the long term positional buying opportunity at lower level where nifty may again test the all time high at 6340 and crossover above will bring NIFTY in FIVE DIGIT in following years.
Nifty looking at the long term chart from 2004 onwards with the level of 1260 has given a sharp rise and with the corrective move has tested the level of 6340, there after the crash of 2008 it made a bottom of 2525 level at point c and sharp reversal was seen but failed to cross the high which it posted at 2008 and point d was seen again at 6340 level and again reversal was seen in after taking short support of 4500 bounce was seen. Looking at the lower rising trend line its expected that market will test 3500 level covering the gap which is formed during the rise and also the previous corrective 161.8% expansion confirming the lower target to be achieved by the year end around.
Positional buying is advice at the level of 3500 around plus or minus 200 points where I am looking nifty to cross the double top of 6340 and move and trade in Five Digit in next Four to Five years.
