Just A Curious Look At Monthly Chart Of Nifty!!!

In my visits to a forum which I frequent often there are a wide variety of people sharing their views about the market. I like the place because in certain respects it resembles the CROWD, we often talk in trading parlance (yes I am a part of that crowd..but tryin2think differently!). There we had really fancy downside targets but after crossing 5k we have now fancy upside targets. You see it is with the crowd that their views change with dramatic impunity. Anyway this led me to a question;

· Is this a technical correction in a primary bull market?

· Or is this an onset of a new Bear Market?

Well I am not an expert and as a learner I know that both are two different situations and have to be dealt differently. If this is indeed a technical correction then we should be aspiring to reclaim the previous high and go beyond if we can. And if this is indeed an onset of a Bear Market then it would be foolishness to wish it away in mere three months as most of the people do when they see a 500 point rise. Let’s take a look at the monthly chart of Nifty (tried to make the chart as simple as possible). We can see that Nifty is still holding its multi year trend line (blue line), and adhering to the Dow Tenet of rising peaks and rising troughs. In such a scenario we can have two things;

· Nifty doesn’t break the level B2, and drifts within the rising trend line (and the channel), then we can safely assume the Bull Market is intact and a year end target of 6500 or more.

· Nifty does break the level B2 and signals trend reversal by breaking the series of rising troughs then we need to be cautious and calculate our targets to the downside and treat it as a new Bear Market.

These are my views and I welcome any corrections or suggestions to the above analysis.

I will sum this post with a Buddhist Proverb "When the student is ready, the teacher will appear."

PS: I am ready! Just waiting for the teacher!!! R U The One?