Following the routine empirical study of Nifty for a quarter, this time I chose to study its behaviour in one month rather, to get a more detailed and better perspective. Heres what I found in the past, 1995 onwards :-
1) The first year of my study, year 1995, Nifty lost almost 12% from the high of 1076 in the first week of February.
2) Following five years Nifty gained every year ranging from a net gain of approximately 8% to a whopping 31%, the latter being the highest gain so far. The details are provided further on.
3) The year 2001 again witnessed Nifty paring 7% of its gains from a high of 1416 to a low of 1314 in the week ended 23rd February.
4) The five years that followed, Nifty again saw an upside. However, these years the maximum Nifty gained was in 2002, a modest 13.88%
5) Years 2007 - 2009 witnessed a fall in Nifty every February. Year 2008, the year of financial crisis witnessed a 8.83% fall in Nifty from a high of 5545 to a low of 5055 in week ended Feb 27th.
6) 2010 again witness a net gain of approximately 7% in Nifty.
Coming back to the year 1996 when Nifty gained the highest, a whopping 31.24%. This gain was divided into three weeks. The first two consecutive weeks Nifty gained 13% each followed by 6% gain in the subsequent week. This year Nifty added 254 points from a low of 813 to make a high of 1067 in the week ended 16th February.
The events that took place preceeding and following the rally were:
i) NSE became the largest stock exchange in India in October 1995, a futile information though to explain the gain.
ii) April 1996 witnessed the launch of S&P CNX Nifty and the commencement of clearing and settlement by NSCCL.
iii) Also not to forget one of the major financial scams, the CRB scam expansed in the years 1992-1996, the amount siphoned off being an estimated 1200 crore.
Coming back to the present, February 2011 has so far witnessed the low of 5178 in week ended Feb 11th. If it is the low of the month or there will be a further fall is yet to be known.
Its "Happy Trading" from me ! Trade well, Trade safe !!!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
Tuesday, February 15, 2011
Friday, October 8, 2010
Correction to my prev post - Empirical Study on Nifty for the period Oct - Jan (1995-2009 and beyond)
This evening, one of my friends cum fellow trader, Parasuram Ramaswamy (PR) cross checked the statistics on Nifty and noted that the year 2008 I mentioned in my prev post as a D year was actually a U year. Indeed it was an upside year. I wish to correct the same now, point 8 onwards :
8. The year 2008 and 2009 gained 894 and 410 points respectively. Year 2009 however still remains the year of lowest gain so far, a meagre 7.91%, from Oct to Jan.
9. Now the matrix is D-U-D-12U-??? With this matrix, I believe that the year 2010 is likely to be a U year again.
10. From 1995 to 2006, year 2006 was a year of minimum gain, and the next year 2007 we witnessed the maximum upside so far i.e. 1520 pts / 48.29% approx. from a low of 4837 in the first week of Oct to 6357 in the second week of Jan.
11. In 2009 Nifty rallied only 7.91%. Will it continue to respect the earlier trend of a maximum following a minimum remains to be seen.
12. Thus I can now conclude (please take note of the P.N. here) that Jan 2011 may witness 8600 or more (approx. 40% from the low of first week) if all the logic and pattern made so far is respected.
P.N. Thank you PR for bailing me out of the perplexity wrt to the trend of the markets this coming New Year.
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
8. The year 2008 and 2009 gained 894 and 410 points respectively. Year 2009 however still remains the year of lowest gain so far, a meagre 7.91%, from Oct to Jan.
9. Now the matrix is D-U-D-12U-??? With this matrix, I believe that the year 2010 is likely to be a U year again.
10. From 1995 to 2006, year 2006 was a year of minimum gain, and the next year 2007 we witnessed the maximum upside so far i.e. 1520 pts / 48.29% approx. from a low of 4837 in the first week of Oct to 6357 in the second week of Jan.
11. In 2009 Nifty rallied only 7.91%. Will it continue to respect the earlier trend of a maximum following a minimum remains to be seen.
12. Thus I can now conclude (please take note of the P.N. here) that Jan 2011 may witness 8600 or more (approx. 40% from the low of first week) if all the logic and pattern made so far is respected.
P.N. Thank you PR for bailing me out of the perplexity wrt to the trend of the markets this coming New Year.
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
Thursday, October 7, 2010
Empirical Study on Nifty for the period Oct - Jan (1995-2009 and beyond)
With Nifty respecting its trend of logical visions so far, I continue with my empirical study, this time for the quarter Oct to Jan for the past 15 years. The observation and conclusion, however, goes beyond 2010 this time. I present the same below :
1. This time the study gets divided into 2 parts - a) oct - nov/dec (where on certain years nifty retraced in mid period), and b) oct - jan ( every year since 1995)
2. In the period Oct - Nov (first week), Nifty retraced/tanked in 1997-1998-1999-2002-2005-2009-??. Here, if I check the logical pattern of D, it is 3D every year till 1999, 2D every 3rd year, 1D 4th year in 2009 ... does that mean 0D in 5th year i.e. 2015 ? If so, we can conclude that Nov 2010 will see no retracement if Nifty continues to respect logical pattern. However, there was neither any significant upside during this period on the U years. Thus, Nifty should be sluggish this year too.
3. From the above, we can also conclude that Nifty will not retrace during this period for another 5 years or more ... a non-imperative observation as on date.
4. Coming to the Oct - Jan period, 1995 (Oct.'95 - Jan.'96) was a D year where Nifty retraced 22% approx. from high of 1044 in first week of Oct.
5. The next year 1996 was a U, where Nifty rallied 188 points approx from 898 low in Oct first week.
6. Year 1997, we witnessed a D again, this time Nifty tanked 13.67% from a high of 1192 in Oct end to 1029 in Jan first week.
7. 1998 onwards, every year for the next 10 years, Nifty rallied during this period. The maximum upside so far was in 2007 when it gained 48.29% from a low of 4837 in Oct 2007 to 6357 in Jan 2010. To be noted here, is that this was the all-time high on Nifty till date.
8. In the year 2008, Nifty witnessed a fall of approx 894 points (10.11%) during this period.
9. 2009 again witnessed a U year with a gain of a meagre 7.91%, lowest gain so far.
10. To sum-it-up, the pattern followed so far has been D U D 10U D U ??? ... what is next remains to be witnessed. Is it a repitition of the first years i.e. D, or a continuation of the 10 years prior ? With such a no-logic matrix, answering this is a difficult task.
11. One significant point not to be ignored here is the fact that in all these 10 years when Nifty rallied (1998-2007) the year 2006 had witnessed the lowest gain of approx 10%. Following year 2007 we witnessed a rally of 48%.
12. The year 2009 has so far been the year of minimum gain with just 8% upside. Hence, I look forward to a major trend in any direction this Oct 2010 to Jan 2011.
Thus, all facts taken into account, Jan 2011 may witness 8600 or more (approx. 40% from the low of first week) or 3750 or less(again, 40% from the high of first week in Oct 2010).
Safe and Happy Trading !!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
1. This time the study gets divided into 2 parts - a) oct - nov/dec (where on certain years nifty retraced in mid period), and b) oct - jan ( every year since 1995)
2. In the period Oct - Nov (first week), Nifty retraced/tanked in 1997-1998-1999-2002-2005-2009-??. Here, if I check the logical pattern of D, it is 3D every year till 1999, 2D every 3rd year, 1D 4th year in 2009 ... does that mean 0D in 5th year i.e. 2015 ? If so, we can conclude that Nov 2010 will see no retracement if Nifty continues to respect logical pattern. However, there was neither any significant upside during this period on the U years. Thus, Nifty should be sluggish this year too.
3. From the above, we can also conclude that Nifty will not retrace during this period for another 5 years or more ... a non-imperative observation as on date.
4. Coming to the Oct - Jan period, 1995 (Oct.'95 - Jan.'96) was a D year where Nifty retraced 22% approx. from high of 1044 in first week of Oct.
5. The next year 1996 was a U, where Nifty rallied 188 points approx from 898 low in Oct first week.
6. Year 1997, we witnessed a D again, this time Nifty tanked 13.67% from a high of 1192 in Oct end to 1029 in Jan first week.
7. 1998 onwards, every year for the next 10 years, Nifty rallied during this period. The maximum upside so far was in 2007 when it gained 48.29% from a low of 4837 in Oct 2007 to 6357 in Jan 2010. To be noted here, is that this was the all-time high on Nifty till date.
8. In the year 2008, Nifty witnessed a fall of approx 894 points (10.11%) during this period.
9. 2009 again witnessed a U year with a gain of a meagre 7.91%, lowest gain so far.
10. To sum-it-up, the pattern followed so far has been D U D 10U D U ??? ... what is next remains to be witnessed. Is it a repitition of the first years i.e. D, or a continuation of the 10 years prior ? With such a no-logic matrix, answering this is a difficult task.
11. One significant point not to be ignored here is the fact that in all these 10 years when Nifty rallied (1998-2007) the year 2006 had witnessed the lowest gain of approx 10%. Following year 2007 we witnessed a rally of 48%.
12. The year 2009 has so far been the year of minimum gain with just 8% upside. Hence, I look forward to a major trend in any direction this Oct 2010 to Jan 2011.
Thus, all facts taken into account, Jan 2011 may witness 8600 or more (approx. 40% from the low of first week) or 3750 or less(again, 40% from the high of first week in Oct 2010).
Safe and Happy Trading !!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
Monday, August 2, 2010
Empirical study of Nifty for the period Aug - Oct
In continuation to my previous post on empirical study of Nifty for April to July, I studied Nifty again - this time from July end to Oct (mid - end) for the past 15 yrs. Below, I present my observation of the weekly charts from 1995 to 2009 ...
1. In the year 1995, Nifty rallied from a low of 1009 to make a high of 1042, a net gain of approx 3.25% For convenience I call this year an "U" or upside year.
2. From 1996 - 1998, every year, in the period Aug to Oct, Nifty dipped. The maximum it pared was in 1996, from a high of 1127 in july last week to a low of 850 sometime in the second week of Oct that year. Hence, these years were a "D" or downside years.
3. The year 1999, again witnessed an upside rally of approx 196 points on the index from a low of 1303 to a high of 1499 in the second last week of Oct. An "U" or upside year again.
4. The years 2000 - 2002 again witnessed Nifty to tank each year during the study period. In the years 2000 and 2001, Nifty tanked approx 20.7% each, whereas, the year 2002 witnessed Nifty loosing the minimum loss in all these 15 yrs., a meagre 4.5%
5. Thus, we have a pattern of one year "U" and 3 years "D" from 1995 - 2002. In continuation, we had an "U" upside year in 2003. And this year saw the maximum gain of approx 35% from a low of 1165 to 1574 high in Oct that year.
6. To continue the trend, Nifty was to tank in the years 2004 - 2006. Contrary to the trend, Nifty gained all these 3 years followed by a gain in 2007 as well. Hence, now we have 4 "U" since the logical pattern of 1:3 U-D broke.
7. Coming to year 2008, Nifty witnessed a max loss of more than 50% (high of 4539 to a low of 2253) during the period. Blame it on the bubble burst aand call it a "D"
8. Last year, in 2009, Nifty rallied almost 760 pts. making it a "U" year.
9. Thus look at the pattern again, we had a one "U", followed by 3 "D", again one "U", followed by 3 "D". So far the pattern was complete. To note here is that the last year of the pattern was the minimum loss year.
10. Further, we witnessed a "U" with maximum gain, and the trend changed altogether. The pattern that followed was 4 "U", one "D", and one "U" so far.
11. Are we going to witness a "U" for another 3 years starting from 2010 to continue the pattern ?? Also, I wonder if there is a co-relation in the fact that the min loss and max gain came in the consecutive years. If the case is true, then 2008 was a max loss year, so was 2009 a min gain year ??
12. In both cases, if Nifty follows the trend/pattern, it will be an "U" year in 2010 from Aug to Oct and Nifty rally should be equal to or more than 17% (gained in 2009).
To conclude, if the pattern is honoured, Nifty should gain approx 900 or more pts by Oct this year from the low of 5349 in last week of July '10, which gives a target of 6258 or more on Nifty.
Trade well, trade safe !!!!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
1. In the year 1995, Nifty rallied from a low of 1009 to make a high of 1042, a net gain of approx 3.25% For convenience I call this year an "U" or upside year.
2. From 1996 - 1998, every year, in the period Aug to Oct, Nifty dipped. The maximum it pared was in 1996, from a high of 1127 in july last week to a low of 850 sometime in the second week of Oct that year. Hence, these years were a "D" or downside years.
3. The year 1999, again witnessed an upside rally of approx 196 points on the index from a low of 1303 to a high of 1499 in the second last week of Oct. An "U" or upside year again.
4. The years 2000 - 2002 again witnessed Nifty to tank each year during the study period. In the years 2000 and 2001, Nifty tanked approx 20.7% each, whereas, the year 2002 witnessed Nifty loosing the minimum loss in all these 15 yrs., a meagre 4.5%
5. Thus, we have a pattern of one year "U" and 3 years "D" from 1995 - 2002. In continuation, we had an "U" upside year in 2003. And this year saw the maximum gain of approx 35% from a low of 1165 to 1574 high in Oct that year.
6. To continue the trend, Nifty was to tank in the years 2004 - 2006. Contrary to the trend, Nifty gained all these 3 years followed by a gain in 2007 as well. Hence, now we have 4 "U" since the logical pattern of 1:3 U-D broke.
7. Coming to year 2008, Nifty witnessed a max loss of more than 50% (high of 4539 to a low of 2253) during the period. Blame it on the bubble burst aand call it a "D"
8. Last year, in 2009, Nifty rallied almost 760 pts. making it a "U" year.
9. Thus look at the pattern again, we had a one "U", followed by 3 "D", again one "U", followed by 3 "D". So far the pattern was complete. To note here is that the last year of the pattern was the minimum loss year.
10. Further, we witnessed a "U" with maximum gain, and the trend changed altogether. The pattern that followed was 4 "U", one "D", and one "U" so far.
11. Are we going to witness a "U" for another 3 years starting from 2010 to continue the pattern ?? Also, I wonder if there is a co-relation in the fact that the min loss and max gain came in the consecutive years. If the case is true, then 2008 was a max loss year, so was 2009 a min gain year ??
12. In both cases, if Nifty follows the trend/pattern, it will be an "U" year in 2010 from Aug to Oct and Nifty rally should be equal to or more than 17% (gained in 2009).
To conclude, if the pattern is honoured, Nifty should gain approx 900 or more pts by Oct this year from the low of 5349 in last week of July '10, which gives a target of 6258 or more on Nifty.
Trade well, trade safe !!!!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
Sunday, May 23, 2010
Empirical view on Nifty - period May - July
A friend recently told me that markets tumble in May and recover on early monsoons. This is the usual sentiment amongst all. To confirm, I went back to read the charts of Nifty for the past 15 yrs. What follows is my observation of the weekly charts for the period May to July, 1995 till date ...
1. From 1995 to 1999, Nifty followed a cyclical trend of falling every alternate year and rallying in the next.
2. However, where Nifty should have tanked in May 2000, it rallied instead. It did not follow the preceeding trend, and made way for the begining of a new cycle. I believe the "Macro" reason being, that Nifty futures were launched in June 2000. Also with the introduction of online trading platforms and huge FII inflows, the markets showed an upside of approx 30% in just 2 months time.
3. This new cycle that began in the new millenium did not last long. In the year 2002, conventionally we were to witness a rally. Instead, Nifty retraced about 15%. The big events that preceeded this fall were suspension of UTIs US-64 in 2001 and VSNL disinvestment in Feb 2002.
4. Since 2002, Nifty followed the rule of falling and rallying alternate years religiously.
Also, no established link between the percentage of gain/loss was found in the markets per se. The maximum that Nifty has rallied upside in these 3 months was approx 38% in the year 1999. Later, the KP scam was associated with the period 1999-2001. Since then, the 35% approx upside seen in period May - July 2009, has been the highest.
The maximum flipside was however approx 28% in May - July 2008, post the credit bubble burst associated lower circuit of Jan 2008.
Coming back to 2010, this year, if the trend continues, is a bear/retracement phase. So far Nifty has retraced about 8.25% from the high of 5279 in early May this year. How far it will retrace is yet to be determined. But how soon it will recover and resume the bull-run is anybody's guess !!!
Trade well, trade safe !!!!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
1. From 1995 to 1999, Nifty followed a cyclical trend of falling every alternate year and rallying in the next.
2. However, where Nifty should have tanked in May 2000, it rallied instead. It did not follow the preceeding trend, and made way for the begining of a new cycle. I believe the "Macro" reason being, that Nifty futures were launched in June 2000. Also with the introduction of online trading platforms and huge FII inflows, the markets showed an upside of approx 30% in just 2 months time.
3. This new cycle that began in the new millenium did not last long. In the year 2002, conventionally we were to witness a rally. Instead, Nifty retraced about 15%. The big events that preceeded this fall were suspension of UTIs US-64 in 2001 and VSNL disinvestment in Feb 2002.
4. Since 2002, Nifty followed the rule of falling and rallying alternate years religiously.
Also, no established link between the percentage of gain/loss was found in the markets per se. The maximum that Nifty has rallied upside in these 3 months was approx 38% in the year 1999. Later, the KP scam was associated with the period 1999-2001. Since then, the 35% approx upside seen in period May - July 2009, has been the highest.
The maximum flipside was however approx 28% in May - July 2008, post the credit bubble burst associated lower circuit of Jan 2008.
Coming back to 2010, this year, if the trend continues, is a bear/retracement phase. So far Nifty has retraced about 8.25% from the high of 5279 in early May this year. How far it will retrace is yet to be determined. But how soon it will recover and resume the bull-run is anybody's guess !!!
Trade well, trade safe !!!!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
Wednesday, April 21, 2010
R-PowerFUL !!!
If we see the daily chart of Rpower (time frame - 9 months), it has made an inverted HnS (Head and Shoulder) pattern. A close today at 159.30, way above the break-out point at 155.50 approx, supported by higher than avg volumes confirms the pattern.
Daily momentum indicators, RSI and Stochastics are positively diverged, whereas MacdH is exhibiting strength.
On the weekly charts, above 153, Rpower has breached a 6 month long trendline, which also looks like an inverted HnS pattern co-incidentally. Again supported by strong and positive RSI, and MacdH. Though Stochastics is slightly in the OB zone, yet is positively diverged.
The target as per the inverted HnS patterns on daily as well as weekly come to around 187-190. Time frame should be approx 2 months.
Accumulate the stock for a target of 187-190. Happy trading !!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
Daily momentum indicators, RSI and Stochastics are positively diverged, whereas MacdH is exhibiting strength.
On the weekly charts, above 153, Rpower has breached a 6 month long trendline, which also looks like an inverted HnS pattern co-incidentally. Again supported by strong and positive RSI, and MacdH. Though Stochastics is slightly in the OB zone, yet is positively diverged.
The target as per the inverted HnS patterns on daily as well as weekly come to around 187-190. Time frame should be approx 2 months.
Accumulate the stock for a target of 187-190. Happy trading !!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
Wednesday, April 7, 2010
Nifty fatigued !!!
A bearish engulfing candle on Bank Nifty EOD. RSI and Stochastics on Bank Nifty are on the verge of giving negative divergence. MacdH looking exhausted.
A doji on Nifty EOD, suggesting indecisiveness. Exhausted momentum indicators trading in the OB zone, higher volumes.
Individually, majority FnO stocks exhibitng weakness.
To sum it all, it seems like its time to unwind longs and short sell at the first visible sign of weakness. Downside, we may witness 5230 levels again.
Happy Trading !!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
A doji on Nifty EOD, suggesting indecisiveness. Exhausted momentum indicators trading in the OB zone, higher volumes.
Individually, majority FnO stocks exhibitng weakness.
To sum it all, it seems like its time to unwind longs and short sell at the first visible sign of weakness. Downside, we may witness 5230 levels again.
Happy Trading !!!
Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.
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