Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Indian Stock Market BSE SENSEX The Encore Rally

Stock-Markets / India Sep 21, 2014 - 09:46 PM GMT

By: Austin_Galt

Stock-Markets

The Indian stock market continues its march higher with no serious breakdown in price. But a significant decline can’t be too far away now. Perhaps this is the final rally - the encore rally. Let’s investigate.


DAILY CHART



We can see price recently came down but surged higher again towards the end of last week. So, we have yet another higher swing low in place with no damage to the bull trend in progress.

I have drawn a horizontal line, labelled Support, at the previous swing low in August. This support level is also where price topped out in July. Old tops often provide support in the future. Breaking down through this level would look bearish.

The Bollinger Bands show price moving away from the upper band at the start of this month and finding support at the lower band. The bounce off this lower band looks bullish. Price is already back to the middle band with the upper band in its sights.

I have added a Parabolic Stop and Reverse (PSAR) indicator which shows this recent power move up busting the dots to the upside and putting this indicator back in a bullish position.

The Stochastic indicator shows a recent bullish crossover while the Moving Average Convergence Divergence (MACD) indicator looks to be threatening one.

WEEKLY CHART



Last week showed a positive candle after being in negative territory in the first half of the week. A nice little bullish reversal.

Price has moved away from the upper Bollinger Band but it looks like it wants to have another crack at getting back up to it. One last hurrah perhaps.

The PSAR indicator is still in a bullish position so bias has to be given to more upside.

I have drawn a Fibonacci Fan which shows the move higher from the August lows has been nudging against the 38.2% angle. It may now struggle to get back above there. That would likely lead to a move back to the 50% angle and eventually lower. Breaking each angle indicates more weakness emerging.

The Relative Strength Indicator (RSI) looks to set up a triple bearish divergence on this next high. That should lead to a significant decline. That is still to be confirmed obviously. Let’s wait and see.

The MACD indicator is still bullish with the blue line above the red line. This coming top looks as if it could well form a bearish divergence here as well.

MONTHLY CHART

The RSI and MACD indicator continue to show the extremes at which this market is trading. A significant decline seems inevitable. The question is how much higher can price rise before that happens?

The PSAR indicator shows the dots still to the downside but getting steeper. Just a matter of time before the dots catch price.

Even though price has moved higher this month, we can see there has been some movement away from the upper Bollinger Band. This looks ominous. Perhaps price has a crack at attaining the upper band once again at the beginning of October.

With just over a week left in this month of September and considering the daily and weekly analysis already undertaken, I feel the month will end in positive territory. However, things really are stretched. It’s becoming ridiculous quite frankly. But the market often likes to push things to the extremes.

Given how stretched things appear, I feel the month of October will see this rubber band like market whip back. I have drawn what I think the October candle will look like. Now this is clearly subjective on my behalf. It calls for a new high in October before a reversal back down. A negative outside reversal candle as the high is higher than the previous month while the low is lower and it closes in negative territory.

We’ll just have to wait and see if things pan out like this. If it does, the next question will be is that the end of the bull market or is it just a correction before another rally further down the track breaks to new highs? We can try to answer that question at a later stage if necessary.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

My website is www.thevoodooanalyst.com 

© 2014 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in