When we are in markets, we do not like to see indicators that could lead to a signal. Its the emotional part of our investing. We try to plot parallel lines connecting the tops and bottoms, and then force ourselves predicting the trend.
One of the things that we forget is a possibility of a reversal. Normally, a pattern generally indicate a reversal of a (reverse reverses a ).
As the chart above indicates, no doubt the rising connecting bottoms, but note the sharply falling connecting the recent tops. Also, a clear head (recent all time high) and the right shoulder developing (around 10550) - albeit, the right shoulder is very disturbed, unlike the left shoulder - a pattern that was similar when the global markets fell in 2008.
There is a good chance that this can take Nifty to close to 10030 (reached on 6 Dec) by around 7 March, and to further lower levels around 9700 later this year (some assembly election results later in the year will provide fodder for this thought). From there, the markets may reverse to rise again.
Apart from the pure , one can add the factor that if FIIs continue selling in March (last month before the LTCG comes into play and if global bond yields continue to rise in next 1-2 weeks too), then the above becomes a reality.
Somehow, for the markets to reverse and rise this month, I dont see any clear positive triggers.
Well, I am not an expert chartist, nor am I an investment advisor, so keep this analysis purely for academic purpose.
(I am posting first time on this site - dont know if the chart gets attached automatically to my idea. If not, please do your own analysis based on data points/dates stated above).
Many experts and analysts are trying to paint a rosy picture on the outside (just to stop a major sale perhaps!), but they too must be busy trying to "Stop Loss" and "Go Short" as the market is finding newer reasons everyday to go down.
Be careful and watchful investors - dont try to catch the falling knife.