Nifty Analysis: Monthly Log Scale

This chart presents three major cycles. Each cycle representing a decade. First cycle worked in 90s; second one in the first decade of 21st century and the third one in the second decade. Perhaps we are in the fourth cycle that would represent the third decade.

The first two major cycles ended with more than 62% percent correction of the entire decadal bull run. The third cycle (recent 2020) was an exception with 40% correction.

There are many ups and down, in each decadal major cycle, called the minor cycles. Every minor cycle also faced 40-62% correction of its impulse.

So if we assume that a top has been in place at 18600 high, then a 40-62% minor corrective wave might land up near 13000 or so. This level should be treated as a good investment zone for long term decadal run which can take Nifty much higher.

I am assuming that a top is in place but market may make multiple attempts to break the highs before it actually starts correction. Also this is a monthly chart so things might take time to show up some results. So be patient.

If you are feeling missed out in this rally then this is definitely not the spot to enter for longer term. Waiting for a better bargain is always good for making fresh investment.

Hope you understand my point.
Regards.

Comment:

On the daily chart it would be interesting to see how it behaves in the 17600-800 zone. Currently facing resistance at the prior swing low 17600.

A strong move past trend line is needed to push the index higher. Resistance from here would call for another wave down.

Comment:

I assumed 18600 as top because I dun wanna predict. Also this post is not about predicting tops.

I do believe that fundamentals are the prime reasons behind a bull market but still market does not move in a straight line. Its wavy/zigzag and that's where technical analysis comes into play, to look for opportunities in those waves and make better returns in a fundamentally strong environment.

The idea behind this post is to look for those 40-60% corrective moves whenever and wherever they show up. Those zones are best for generating good ROI in a smaller time period, like what just happened in the recent move from Mar2020.

Thanks for bearing with my ideas.