The Day Of Reckoning
The Indian stock market seems to be following a precisely charted Kaal Chakra. And today could be the critical day for the next directional change.
The past five years has seen a sea-change on the Indian stock market. Yet, for all the change that has been brought about by computerised trading, new systems, new players and new regulations, the stock market itself seems to be following an almost predetermined cycle. In fact, it seems to be following a precise Kaal Chakra.
The entry of larger players with more funds has naturaly led to a new demand-supply equation. This is clearly reflected in the chart of the BSE Sensex which appears to be in a consolidation phase and is oscillating in the 2000-4500 range for the past few years. However, even when the Sensex is awaiting fresh directions, it subconsciously appears to be moving on the directions of the Kaal-Chakra.
27/04/93 to 12/09/94
The Bse Sensex posted a low of 1980 points on April 27, 1993 and subsequently rose to record a high of 4643 points on September 12, 1994. The entire bull run lasted 503 calendar days (CDs) or 1.382 years (365 x 1.382 = 503). It is important to note that 38.2,50 and 61.8 are important fibonacci ratios frequently used in technical analysis.
12/09/94 to 29/01/96
The Sensex posted a high of 4643 points on September 12, 1994 and subsequently fell to a low of 2820 points on January 29, 1996. The entire fall again lasted for 503 CDs, thereby depicting that the Sensex was moving within a definite market cycle.
29/01/96 to 04/12/96
After posting the low at 2820 points on January 29, 1996, the Sensex recorded another significant low at 2713 points on December 4, 1996. The time between 29/01/96 to 04/12/96 was precisely 311 Cds. (503 x 618 = 311).
The recording of a major low on a significant turning date goes a long way in proving that the Sensex is moving on the tracks of the time tested market cycle.
29/01/96 to 16/06/97
The next major turning point for the Sensex thus falls on 16/06/97, whi-ch is 503 CDs from 29/01/96. The Sensex can thus be expected to record an important high on June 16, 1997.
Further, the Sensex posted its last major peak of 4131 points on 17/06/96 which completes an anniversary cy-cle for theSensex on 16/06/97.
Value Projection:
There are various important resistances around 4215-4228 points, which can prove to be extremely formidable for the Sensex. Ide-ally the Sensex should record its top in this range.
However, in case it fails to reach this level, one should not rule out the possibility of the Sensex recording an intermediate high on this date.
June 16, 1997 - The Final Countdown:
It is extremely important for us to acknowledge the fact that the prime rule of technical analysis is to