Now lets look at weekly chart of Nifty in 2008; and try to spot similarities between what happened in 2000-2002 and what scenarios can play out now.
Let’s compare 2000-2002 period with current period of 2008 and what scenarios can play out of it’s the exact repeat of 2000-2002 period.
2000-2002 Bear Market
1. Nifty peaked in Feb 2000
2. It took 8 months for the market to slide to 200 week moving average (Feb 2000 to October 2000)
3.Price correction to 200 week ma from peak = 36%
4.There was 20% bounce after market touched 200 week ma and it happened during Oct-Feb which is good period of equities.
5.The market then tumbled below 200 week moving average in March 2001.
6.The market sharply tumbled 30% on break below 200 week moving average.
7.Time Correction – It took 29 months for market to recover once market slipped below 200 week ma. It was a painful slow recovery
8. The bull market resumed when market finally broke out above 200 week ma
Anticipated 2008-2010 Bear Market
1.Nifty peaked in Jan 2008
2.Nifty is about to touch 200 week ma and it’s already 9 months (Jan 2008 – Sep 2008)
3. Price correction to 200 week ma from peak = 42% (not reached to 200 week ma)
4. May Happen …It means market may bounce from 3650 to 4500 levels in next 3-4 months…pre-election/seasonal rally
5.The next wave of correction may come in Feb-March 2009 just before elections and market can slip below 200 week ma
6. Quite possible during elections – Nifty can tumble 20 to 30% below 200 week ma
7. The real bear market painful period may come in 2009-2010 period and bull market may resume in 2011
8. 200 week ma can be a pivot point for next bull run
It means we may see a strong bounce in next 3-4 months before we see another sharp correction.
Hope u Received my mail,
The Target of 3200 for Nifty is
approx. 15th October.
BSE sensex also touch 10000 same day
After crossing the 200 SMA market is bear market.
that is a nice one bramesh. Good insight and food for thought.
I too have a blog on nifty.
I tried to see your profile but could not get too many details. Would be nice to know you.