If technical analysis from the past is to be believed, then Indian Stock market is headed for a 29 Months bear market from this month. WTF ? Well, here is the basis for the same. The present fall has striking similarity to the 2001 correction and the bear market there-off.
Have a look at the following chart of 2001, [Courtesy: Deepak Singh]
The basis of the above research is 200 Week Moving average of Nifty and not 200 Day Moving average. You can see when Nifty cracked below the 200 Week Moving average, it stayed below it for 29 Months and a bounce back after that has led to a sharp rise.
Nifty’s 200 Week Moving average is around 3,600 and which has touched today. If the same pattern as that of 2001-02 is to be followed, then it should rise to 4300 level once before it tanks decisively below 3,600 again, which is when it will stay there for over 24 months. The following Chart shows the same,
Ofcourse, Nifty is behaving in the same pattern as it did earlier and 200 Week Moving average is one of the best indicators for long term behavior of this market. Well, lets just hope that the global financial turmoil ends soon and then moves towards consolidation and hope it will all be under 29 months. What do you think ?