I have been tracking the DOW JONES weekly chart from the last couple of months when it started showing consecutive green days regardless of global factors, earning reports, etc. So what intrigues me out of the weekly chart is the hastiness of the DOW towards the upper band of what appears to be a forming RISING WEDGE. DOWs rise recently has been crazy to say the least. Last month would make even the dumb money feel like a Buffett or a Jesse. Its been on a continuous rise, plain and simple, no matter what. Now according to the chart we can take the spot levels of anywhere between 23450-23650 to be the reversal zone for DOW and it might retrace all the way down towards the lower band of the RISING WEDGE and by that time if the relevant factors are weak then it might fall down and then we'll be looking for a new support level but that would be a big downfall(CRASH) and also the global markets will follow the pattern. And as far as our markets are concerned what I found interesting was that Nifty is also making the same pattern of RISING WEDGE on the weekly chart. Our markets are fully blown too with Mutual Funds simply pushing NIFTY up for no reason and when that happens a crash is bound to happen. Investors should keep an eye on these things and should be aware, whereas for the traders, you know how we do it!
SNAPSHOT OF DOW JONES RISING WEDGE on WEEKLY CHART
Comment
⋅
Have you all noticed that how the DOW which has been gaining at least 500-800 points on a weekly basis from the last three to four months is suddenly stopped out for the last 2 weeks and faced a price rejection in the resistance zone of 23450-23650 mentioned above. Also Nifty too faced a price rejection in the reversal zone mentioned in the post and till now both the indices are almost following the same path sneakily enough so that one can easily miss their similarity of movement. The fear gauge of DOW also rose to 14.34 it's highest since Aug 29 2017. Whereas, India VIX has also managed to stay above 14 the whole last week. Having said that, we are for now expecting a bounce in Nifty from the current levels within 3-4 sessions. Keep an eye out.
@yndesai,m an investor i look for these types of fall but i dnt think u r gonna see a level of 9600 also
yndesai
⋅
@KumarAbhilash,
I have kept this nifty scene in mind for long time. It's just in case.
In case of fundamentals also Nifty is near life time high PE getting good
long term bet has become too hard to spot at such valuation.
kacharts
⋅
@yndesai, bro u have very big misconception about pe , first of pe depends upon alternative investment i.e FD rate , the time fd rate went down pe range has been shifted upward from 25 to 30 on higher end and most importantly pe can be misleading in the bottom of earning cycle and peak of earning cycle. so only on pe basis u cant say market is expensive. u should check market cap to gdp ratio its still below 1 in india and right now market is moving on liquidity (this is how bull market starts ) soon we r going to see earning turnaround.. so i expect this bull rally to be extremely big
yndesai
⋅
@KumarAbhilash,
I keep cautious view at current level. I have been monitoring elliot wave on Nifty. End of wave 3 is near for sure,
How much of upcoming (expected) earning turnaround is factored in is not known. Liquidity is by DII as lot of SIPs of common people (including mine) is coming in market.
BTW on PE shifting to higher grounds (interest rates and PE are not very tightly co-related) following fact might help
Historically we had interest rates lower than current levels you can check data.
April 2009 to March 2010 :
RBI repo rates 4.75/ 3.25 Nifty PE : 22.3 to 23.5
Aug 2017 to Nov 2017 :
RBI repo rates 6/5.75 Nifty PE : 26 to 26.3
It never hurts to stay cautious.
kacharts
⋅
@yndesai, interest rate m talking about alternative that is bank interest and we will definately see whether market is gonna crash or boom and i believe till now we have seen market rallying on liquidity front which generally happens in start of bull market and 2nd stage is earning push which i beleive we gonna see soon