Technicals with Kunal: A rhythmic chart signals a high ahead; Or is it a bull trap?
By Kunal Bothra
Sentimentally, with the Union Budget done, RBI policy ‘outlook’ clear, Trump policies sinking in, DeMo effect almost absorbed by the market well, do you believe this market has room to go higher? Or are you from the camp who feels this rally is a bit overstretched?
Well, whichever side you are on, the chart below would place in what I call a classy perspective for you. It may even leave you STARTLED!!
People who know me well, and my penchant for TA (technical analysis), know that I place a huge amount of emphasis on price patterns and then maybe solidify them with indicators. One of the theories, which I have believed in, is the rhythmic nature of price patterns and the tendency of prices to repeat them time and again.
As I stated in my first article on Linkedin, "Fibonacci Theory on Nifty" and few others such as on Dow Jones , price patterns do reoccur and rhyme. The chart below is based on a similar perspective.
” History doesn’t repeat itself but it often rhymes,”
- Mark Twain
Just for developing your interest, I have removed the name of the chart, so that it removes the ‘INITIAL’ bias from your mind.
Have a closer look at the two 'ALMOST IDENTICAL' charts, and the marked data points very-very closely.
Chart 1:
Chart 2:
Six data points marked in that order:
1. Consolidation
2. Bear Trap
3. Time of Correction – Exact 1 year
4. Failed attempt to new high
5. Correction of 4 month
6. Bounce from Blue MA line.
Isn’t this interesting? Is it a stock, or an INDEX.... Let’s find it out..!!
To top it up, the entire chart pattern is spread over exact four-plus years, on each of the time frames, and it is very-very similar.
Now, I can understand your restlessness to know the name of the chart. So without much ado, it is one of the key indices in the Indian stock market – BSE Bankex.
And now look at the chart (sans all the graphics) in totality, and the picture would be pretty clear in your mind. The period marked between 'yellow lines' holds significance going forward.
Sentimentally, with the Union Budget done, RBI policy ‘outlook’ clear, Trump policies sinking in, DeMo effect almost absorbed by the market well, do you believe this market has room to go higher? Or are you from the camp who feels this rally is a bit overstretched?
Well, whichever side you are on, the chart below would place in what I call a classy perspective for you. It may even leave you STARTLED!! People who know me well, and my penchant for TA (technical analysis), know that I place a huge amount of emphasis on price patterns and then maybe solidify them with indicators. One of the theories, which I have believed in, is the rhythmic nature of price patterns and the tendency of prices to repeat them time and again.
As I stated in my first article on Linkedin, "Fibonacci Theory on Nifty" and few others such as on Dow Jones , price patterns do reoccur and rhyme. The chart below is based on a similar perspective.
” History doesn’t repeat itself but it often rhymes,”
- Mark Twain
Just for developing your interest, I have removed the name of the chart, so that it removes the ‘INITIAL’ bias from your mind.
Have a closer look at the two 'ALMOST IDENTICAL' charts, and the marked data points very-very closely.
Chart 1:
Chart 2:
Six data points marked in that order:
1. Consolidation
2. Bear Trap
3. Time of Correction – Exact 1 year
4. Failed attempt to new high
5. Correction of 4 month
6. Bounce from Blue MA line.
Isn’t this interesting? Is it a stock, or an INDEX.... Let’s find it out..!!
To top it up, the entire chart pattern is spread over exact four-plus years, on each of the time frames, and it is very-very similar.
Now, I can understand your restlessness to know the name of the chart. So without much ado, it is one of the key indices in the Indian stock market – BSE Bankex.
And now look at the chart (sans all the graphics) in totality, and the picture would be pretty clear in your mind. The period marked between 'yellow lines' holds significance going forward.
