Market outlook : given on 11th June 2010

Following is an article that was published on 11th June 2010. Those few people who looked at this article were sceptical if this chart analysis and the write up would come to life. But to their surprise, the forecast of this chart came true. Do read them to understand it better.

To read original article click here: http://arasarideas.blogspot.com/2010/06/market-outlook-long-term-view.html




Often we are puzzled about the direction of the market. Many of us usually buy when everyone buys and sell in panic when everyone is selling. Though handling such instances could be psychologically challenging, the use of technical charts could come in handy in such situations.

After long market correction in 2008, Markets have actually started on an uptrend. But the actual potential of the market in the long term is little understood. That makes many book short term profit or loss.

For instance, today (11th Jun 2010) markets ended the week on a buyoant mode. Lots of positive news from global markets helped the domestic market rally by 140 points on the sensex to 17050 levels. And Nifty ended up at 5119 (+40 pts). Those few investors who had these technical views before hand bought boldly and are now sitting in rich profits. Many of the investors who are sitting on the sideline would be worried if the market has got some more steam left.

Here is a simple analysis of a technical chart.

(1) Nifty on 14-Aug-2008 was at 4430
(2) From 4430, Nifty fell to 2584 on 31-Oct-2008
(3) Now look into the table below. You would actually see the markets actually retracing the uptrend as per Fibnocci calculations.
(4) As calculated, markets have reached exactly 5301 on 9th April 2010 and have fallen down. Now market is now picking up and closed today at 5119

Now the outlook:
The first target of the market in the short term could be 5301, followed by 5478. But after 5301 itself, market could be in the long term uptrend leading to 6131. Beyond that you could see much higher values on the NSE.

Many may now wonder : what about the short term trend reversals?
Technically at each retracement levels, market could slide.

Markets could see major reversals on 8-Oct-2010, 25-Feb-2011 and 29-Apr-2011.
Probably we could touch all time high of 6131 by these dates.

Now with this picture in mind, Long term investors can stay invested and pick stock when ever market falls.