Although the market is in a sell mode on all time frames,
Nifty is flirting around the 200 weekly MA. This made me
take a look at what had happened when Nifty was near the
200 weekly MA the last time, and the results are given below :
(Fundamentals can be debated, but charts cannot be ignored)
Nifty took support at the 200 weekly MA first in December 2011,
when it rallied 24% from a low of 4531 to 5629, and then
fell back to the 200 weekly MA.
INTERESTINGLY, in the last week of May 2012, Nifty made hammers
on 2 consecutive weeks but again came down in the third week
(something similar to what is happening now). The next week,
after making a low of 4770, it rallied over 30% to 6229.
WEEKLY CHART:
The only time Nifty went well below the 200 weekly MA was in
October 2008, when it just sliced through the important support.
The pattern on hourly charts is also very similar, as shown below:
HOURLY CHART IN DECEMEBR 2011 :
HOURLY CHART IN JUNE 2012 :
CURRENT HOURLY CHART (SEPTEMBER 2013) :
This post is not at all about ‘bottom fishing’, but one needs to
keep an on the first signs of reversal.
Who knows, a 15-20% rally might be round the corner.
Going by history, a rally is possible, let people call it the Raghuram rally,
or the Lord Ganesha rally !!
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