In our last post we had mentioned that since the major bottom posted in Oct 2008, Nifty
has been following Fibonacci time series. In continuation of that report, we would like to put stress on correction time of Nifty
post Fibonacci timer series point. Correction during time 2 to 3 took 13 months , 3 to 4 took 8 months and 4 to 5 took 13 months. 8 and 13 are part of Fibonacci series. If history is going to repeat then market should correct in this month or from next month onwards and should correct till Dec-19 or May-20. Nifty
is trading in parallel channel
on monthly log chart. It had almost reached upper trend line
of parallel channel
but didn't touch it .If we assume that 11856 is the high of parallel channel
then considering 8 months correction cycle as per fibonacci series, we could end up near 8800-9000 in Nifty
(support of parallel channel
). It looks exaggerated at this moment but same was the case in last 2 instances of Nifty
reversing trend after touching Fibonacci time series line. 1100 points correction from top of 6228 is 16% , 2300 points correction from 9100 is 25% from top. Nifty
should hold 10800 on weekly/monthly closing basis to continue upward journey as per Log chart. If it closes below 10800, then it will break the long term trend line
which started at Oct-08 bottom.
Let's see how things pan out in next couple of months. For short term(5-8 months) we see market to correct but holding eye on 10800-11000 support zone
. Our view will be negated if Nifty
close above 11900 on weekly basis.