This forum being dedicated for sepperating wheat from chaff, I am not sure it is right to post this here. Any way sharing my observation. Any respectable members who can guide me in a better way in this analysis pls share their valuable views
0,1,1,2,3,5,8,13,21,34,55,89,144,233,377,610 …, ……, ……, ……, ……
Fib Numbers are a series starting with 0 and 1 the next number is the sum of previous two numbers.
After the first few numbers in the series the ratio between subsequent numbers are a constant 0.618. The ratio between one number and previous number in the series will be 1.618. Ratios between alternating number is 2.618 and reverse ratio is 0.382. These are important fib ratios.
The fib sequence and fib ratio has got astonishing influence in many natural phenomena, and is said to influence financial markets also
Fib time sequence in the present rally.
The present rally in nifty has started from the lows of 2013 aug. ie 5119( When ReghuRam Rajan took over as RBI Governer followed by BJP’s declaration of Narendra Modi as PM candidate in sept 2013.This rally till present has shown an amazing sequecnce of fib time zones.
Low on Nifty was made on 28th august 2013 which was 5118. On march 4,2015 nifty made a high of 9119. This occurred after 374 trading days from 28th august 2013, which is very near to a fib number 377. Then a correction happened and nifty fell to 6825 in feb 2016. The closing low was on feb 11th 2016 which was 6976. This was after 233 trading days from march 4,2015. 377 X 0.618 =233. (0.618 is the golden fib ratio)
The next high was on sep 8th 2016,closing at 8953. Ie 141 trading days from feb 11th 2016, which is very near to a fib number 144. Again 233 X 0.618 = 144
Then the demonetization low came on Dec 26th 2016, and this was 73 trading days from sep 8th 2016. 144 X 0.5 = 72. (0.5 is also considered as important fib ratio.)
From Dec 26th 2016 low of 7893 nifty has rallied in a non stop manner and several fib time zones passed like 55, 89, 144, etc. Now next fib number 233. 233 trading days from Dec 26th 2016, falls on Dec 5,6th 2017. Will nifty hit a high near those days and retrace after that is the next big question.
This is the weekly chart of nifty.
It can be seen that if nifty hits 10600-700 in the first week of Dec 2017, it can face resistance on the channels upper boundary of the present rally from feb 2016 lows. This coincides with the previous Fib time zone theory of 233 trading days. If nifty hits resistance at 10600-700 levels near first week of Dec 2017 and then goes in a correction mood, that means the fib time sequence is working again.
After hitting the resistance nifty may go into correction mood. I expect a major high of 11200-300 after 610 trading days from the on feb 11th 2016,which is another fib number. I took this 610 as it is 1.618 X 377, which was the first rally from aug 2013-mar 2015. 1.618 is the ratio between two successive fib numbers. This will coincide on August 2018. This will hit the upper boundary of the upward channel shown in the chart from the 2009 lows.
After that 0.618 X 610 = 377 trading days correction which may take nifty to the bottom boundary of the channel may happen. This will coincide at 9600 levels by Feb 2020. By the time there may be earning upgradation happening there by cooling the PE multiples to fair valuations.
Then next fib number 987.ie 610 X 1.618. This works to about 4 years from feb 2020. Ie 2024. trading days Mean time any breakout above the upper boundary of the upward channel from 2009 lows may initiate the mega bull run.
Here is the long term chart of nifty from 1990.
NIFTY CHART 1990 onwards
NIFTY LOG CHART 1990 onwards
After the 1991 Bull market , nifty consolidated within a channel, which was brocken out in 2005 for the next bull run.This can be seen in log chart also. Interestingly in the log chart 2024 coincides with 32000 range in nifty. Elliot wave international, an authority in EW analysis has given a target of 100000 sensex by 2024 in 2009 itself. And 100000 on sensex means 32000+ on nifty.
Discl: This is just my observation from my limited knowledge of chart analysis and fib time sequences. As they say limited knowledge may be more dangerous than no knowledge. I can be completely wrong also. And the pattern in nifty till now which resembles a fib time sequence may be a mere coincidence also.
(I am still 100% invested and is planing to deploy more in corrections. Does only portfolio reshuffling at times. Not planing to change to more than 20% cash at any point. Has hedged my portfolio by holding gold mining stock- deccan gold, gold refining stock- shirpur gold, and invested in DSP blackrock world gold fund. These alltogether has 20% of my portfoilio)