Sunday, August 21, 2011

Bulls in the Hope Stage

As the Nifty touches 4800, there may be a fair amount of hope among the bulls. The feeling is: we have touched the final lows of the bear market. Finally, the bulls may say, the end of the bear is visible.

I would disagree. Bear markets do not end with a lot of hope. They end with pessimism and capitulation. This is not visible in the market, at least not yet. At some point, bear rallies are likely to come about. I will treat any rally as a correction in a bear market, eventually expecting lower levels.

A head and shoulder pattern in the Nifty suggests a target of 4100. We should remember that patterns can fail, fall short of targets or exceed them. Therefore, a pattern is not an assured outcome. markets can do anything. But, patterns are what we have to trade with. Here is the Nifty head and shoulder.


kailash chaturvedi said...

hi nice sudarshan..I too possted the same..but in morning yesterday..we are on same track ..have look please ..

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