At Cross Roads Once Again…

BSE Sensex: (6362.76)
3.12.04

'No high is high and no low is low' is the catch word that caught my eye many years ago when I started to learn Technical Analysis…little did I know then that a day will come when I would be asked to write a piece as to what will the market do when it has ventured into the Virgin Blue Sky territory…a territory where it has never traded before…

Technical Analysis is a science and the art is in the interpretation of it…to me the markets are technically perfect…it has appointments to keep with time and space and come what may…I may sound a bit arrogant here but then to me Technical Analysis is a science…and I respect it as such…

When we have a past history o work with then we do know as to what to expect from that past as the path ahead becomes clearer but here we are engaged in activity where the Bombay Sensex is trading in an uncharted virgin territory…Today the Sensex has reached a new high of 6361.53 but what now is the big questions…

We are at cross roads once again and this morning I was taken aback when the TV host of a popular business channel asked where do you think the market will turn? I responded by saying that it would be very arrogant of me if I said that the market will turn at so and so point because Market is dynamic in nature and is 'Supreme' and it humiliates each of us every day in our very own little way…amen…

The Sensex has seen a all time high at 6150.69 on 14th February 2000 and that was before the great IT bubble bust… and then we saw a low of 2594.87 on 21st September 2001 after 585 days…and that was just 10 days after the infamous 9/11 attack and the day 'terror' struck America…the world was in a state of shock but the market bounced back just 10 days after the attack…and mind you it was a technical bounce as the low was a good low on technical parameters…the market then struggled for a while to find a bottom at 2904.44 on 28.4.2003…embarking on a new journey the up move then followed to find a new top at 6249.60 on 09.01.04 a climb of 3246 points in 256 days…the market then yo-yoed again to find a strong technical low once again on the Black Friday on 17.05.2004 at 4227.50..incidently 4227.50 is also a strong technical low on my parameters….but what now is the big question here, as the market has gained 2134 points to reach this new high of 6361.53 today? Well, the answer is simple and that a new technical resistance has to found where the market has the potential to turn…and this too has to be a technical top…

To me there are technical tuning points in the markets and there are technical pressure days to work with …

The next Technical pressure points to watch in the market are 6503 then 6724 then 6821 and then 7008…

The next Technical pressure points to watch in the market on the Nifty front are 2031 then 2145 then 2169 and 2342 and then 2367…

The Pressure days in the days to come where the market has the potential to turn is 4-5 and 6th December 2004. Incidentally as we write this column…4 and 5th are Holidays and the next immediate pressure date is 6th December 2004…and the next Pressure day where the market has the potential to turn in the year 2005 is 06.05.2005…the million dollar question now is…Will the market turn on these pressure points and on these pressure days? The answer can never be a simple 'Yes' or a simple 'No' because these 'points' have to be interrogated afresh after these swing highs and these swing lows are made for what is know the THIRD unknown dimension…until then the best thing to do is trade the market and not the forecast…and if we find some weakness at these pressure points then the thing to do is to ACT…until then…

Happy Trading

Prakash Gaba MSTA ( London)

Will it?

BSE Sensex: (6551)
4.1.2005

In my articles published in the Financial Express on 6.12.2005, I talk about the Potential Turning Points and I quote…

"Technical Analysis is a science and the art is in the interpretation of it…to me the markets are technically perfect…it has appointments to keep with time and space and come what may…I may sound a bit arrogant here but then to me Technical Analysis is a science…and I respect it as such…"

'The next Technical pressure points to watch in the market are 6503 then 6724 then 6821 and then 7008'

"The million dollar question now is…Will the market turn on these pressure points and on these pressure days? The answer can never be a simple 'Yes' or a simple 'No' because these 'points' have to be interrogated afresh after these swing highs and these swing lows are made for what is know the THIRD unknown dimension…until then the best thing to do is trade the market and not the forecast…and if we find some weakness at these pressure points then the thing to do is to ACT"

The Market has seen a high today at 6696.31…we have a very strong resistance at 6700.46…this point 6700.46 is also a strong potential technical turning point like the point 6724 and also a psychological 6700 mark…and like we said that the market has to be interrogated afresh after a swing high or a swing low is made…I have strong reason to believe that the market has seen a high at 6696 and the move looks reactive and if it goes up then it is likely to be 6700 or around 6724…will it? Well only time will tell…meanwhile I would wait for a confirmation and the confirmation will come if the market starts to trade below the 6640 mark…Caution is the order of the day as I said in the Morning Call on CNBC yesterday because to me the upside is limited…Amen

Prakash Gaba

Weekly Chart:

Anyone who claims that he bought the 'Lows' and sold the 'Highs' on a regular basis is a liar...but these points just establishes a fact that the market oscillates between Technical Supports and Technical Resistances to a precession...

The 'hits' before this date are not published here...purely because I never wrote on the public domain then...extracts are from weekly articles published...

The average range of the market is around 40 points in a day...

Afternoon 13.2.2001 (Weekly Newspaper) and also published on
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Technically the Sensex is still in positive territory…and what I would ideally want to see is a decisive break of 4460 on the upside and until that happens...its in a discomfort zone...

Top (1)
4462.11
16.2.2001
(3 days before the event)
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Afternoon 10.4.2001 (Weekly Newspaper) & also published on:
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www.prakashgaba.com

(This article was transmited when the market had closed on 6th April (Friday) at 3576 and saw the bottom at 3096 i.e 480 points down...)

Technically the market is still weak…and if the weakness continues the logical target of 3165-3135 and even 3075 still holds good and cannot be ruled out with intermittent support coming in at 3415 and 3280 but...but if the market recovers...it is likely to find resistance at 3730 and 3803 and unless 3803 is taken...the market is still weak on my parameters...

Bottom (2)
3096.51
16.4.2001
(6 days before the event and the market dropped 362 points in 3 days)
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Afternoon 22.5.2001 (Weekly Newspaper) and also published on
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www.5paisa.com
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www.prakashgaba.com

Technically the market is still in positive territory and has encountered a resistance at 3700 and at present seems to be in a reactionary mode and is likely to find support in the region at 3630, 3570 and a strong support at 3490...the break of which will trigger my alarm bells and I would exit the market on the long side at the break of 3465 but the market has still some steam left and can rise to 3800 and also to 3860 levels in the days to come but will have to first negotiate the resistance at 3705 and 3760 on its way up...will it? Perhaps Software holds the key...

Top (3)
3759.96
30.5.2001
(6 days before the event)
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Afternoon 25.9.2001 (Weekly Newspaper)
(Article written and transmitted on a Friday on the day of the bottom) and also published on:
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Technically the market is still weak until of course 2820 is taken on the upside...Technically the market has taken support from a very strong support like a dot at 2595 the break of which could see the Sensex slide further down to the next strong support at 2395 and maybe 2350... Technically if we are to see any bounce for any length of time then I guess it is now...The time is just right...Technically the major world markets are also sitting on a major supports and that cannot be ruled out so easily...Technically the support on its way down is at 2528-2499-2450-2436...Technically the resistance on its way up is at 2634-2648-2676-2705…

Bottom (4)
2594.87
21.9.2001
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Afternoon 26.2.2002 (Weekly Newspaper) and also published on:
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www.5paisa.com
www.ways2gain.com
www.prakashgaba.com

I had a target last week of 3810 until the budget and the same has been modified now to 3750 but to get there the market must trade thru 3655...but, Yes but I would also watch the point 3540 the break of which would signal a premature termination of the move.

Top (5)
3758.27
4.3.2002
(6 days before the event
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Weekly article published on 25.10.2003 (3 days before the low)
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The market came down as expected and the mood has turned desperately bearish and the low of the week is at 2856, which incidentally is not a very strong technical support from where we can say that the market has bottomed out though it has some technical validity but many traders believe that this is value buying time. I would been happy if the bounce was from 2843-2847 regions where the interim bottom would have a better validity but it has not happened and so may be in the days to come and if the market bounces then we may see a short rally that may continue up until 2926-2947 and if the market breaks 2847 and stays below it then we are heading towards 2811and a further break from 2811 to 2727 and that would be the logical target if the market stay bearish. The weak ahead is also an options expiry week and I expect volatility at its best...

Bottom (6)
2828.48
28.10.2002
(3 days before the event)

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Daily article published on 10.1.2003
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BSE Sensex: (3384) the upside came...the logical resistance also came and we hit it like on a dot once again...the market closing positive for the day by 26 points and the next trading session ahead seems positive as yet...and looks like it should be Infosis that should influence the sentiments...

The support for the Sensex is at 3374-3362 and the resistances to the up move 3390-3394-3397-3416

Top (7)
3416.92
10.1.2003
(1 day before the event)
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Weekly article published on 26.4.2003
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Some week's back we had also talked about a pressure date...29th April 2003 and that is this coming Tuesday...what does it mean? It means very simply that it is simply a pressure date and if the market has to turn then it is a very good day to turn on (+/- one day)...I am NOT at all saying that the market will turn here but what I am saying is that there is a good possibility here...but until now there are no technical signals available to indicate so or bank on...the symptoms are there and are also in the process of making but they are still not there...

Bottom (8)
2904.44
28.4.2003
(few weeks before and also 2 days before the event)

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(The average range of the market is around 120 points in a day...)

Weekly article published on 12.1.2003 but transmitted on Friday Evening 9th January 2004
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Technically speaking we are shy of the 6274 mark by 24 points and shy of the 6298 target by 48 points…technically we have a good cycle day coming on 17th Jan but that is a Saturday and so we have until Friday to catch up these points if we have to…technically we do have a minor cycle convergence on this 9th that happened on Friday and so we are sitting in a tight corner…technically the pattern generated for the day is a weak pattern…but the crucial confirmation as usual is still elusive…

The support for the Sensex on the way down is at 6000-5870 and the resistance on the way up at 6250-6274-6298-6316

From a trading perspective I would like to treat this market as cautious up or 'done' and the first sign of weakness will be the break of 6000…

Daily article published on 15.1.2003
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BSE Sensex: (6194) as expected the market climbed up to close positive for the day by 61 points...so why say it's down unless it breaks our support at 6163...

The support for the Sensex is at 6182-6163 and the resistances to the up move is at 6250-6274-6298

Top (9)
6249.60
9.1.2004
(on the night of the day of the top)
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Expectations 2004 on CNBC on the eve of the Budget & on
www.prakashgaba.com &

Daily article published on 23.1.2003
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Budget Blues:

Sensex: (5876)
28th January 2004

6250 is an intermediate technical top...a technical bottom needs to be found....could have been 5675 but it is not so...now we will have to look at 5320 or 5065 levels and depending on the cycles...

Cycles wise we still have time to find a bottom...the next dates are: 16th April, 26th April...maybe 15th March...we are still 3 months into it and so this area looks like ideally a pattern formation time...if some kind of a continuation pattern forms here then it is good for the market...for a fresh move up...but if the market breaks out from 6250 before a strong technical bottom is identified then it will zoom to 6503 levels but then technically that will make the market more week... as it sets itself up for a deeper correction...

On the upside we do have strong resistance levels....6503...6765...7090 and 7800

If we do get a bottom around 5320-5065 then the journey from these levels to 6250 will be a tough journey and is likely to take its own sweet time...

Nifty: (1863)
Recent high is 2014...target was 2007...target achieved...

Support is 1596 levels...Resistance 2176-2324-2537

Bottom (10)
5325
23.3.2004
(56 days before the Bottom)

Weekly Column Published on 15.3.2004
(9 days before the event)

Daily article published on 23.1.2003
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And if the market breaks 5550 then it is good night markets...the next level to watch then would be 5320...

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Daily article published on 22.4.2004
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technically we cannot afford a reversal at this point because if that comes then we could be heading for a disaster...I only hope that the market does not open with a bull gap and come down...

The support for the Sensex is at 5895 and the resistances to the up move is at 5949-5979-5999-6051

Top (11)
5979
23.4.2004
(1 day before the top and also 87 days before the event. We also talked about the pressure date of 26th April on CNBC-Expectations 2004. 24-25-& 26th was a holiday and the market saw the high on 23rd)

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Daily article published on 18.5.2004
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4224 is a strong technical support and that is a hope if the market has to bounce back...It did...and mind you if market closes below 4224 then the next strong support is 3600...this is on a larger canvas...

Bottom (12)
4227
17.5.2004
(identified on the day it happened)

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Daily article published on 8.3.2005 
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The market was up and closed positive for the day by 30 points... the trading pattern for the day has reveled a chink in the amour… secondly we had a very strong resistance on the Nifty front at 2170 and we fell short by 3 points… one more thing… there also is a strong resistance at 2176…so that's the are we need to be cautious about…I would consider the market as up but would liked to look for the first sign of weakness at the break of 6854…

Article Published in Financial Express on 2.1.2005

The next Technical pressure points to watch in the market on the Nifty front are 2031 then 2145 then 2169 and 2342 and then 2367…

Top 13
6893 - Sensex
2183 - Nifty
9.3.2005
(1 day and 39 days before the event)

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Daily article published on 18.4.2005 
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The support for the Sensex is at 6232-6185-6118 and the resistance to the up move at 6321-6382

Bottom 14
6118.42
18.4.2005
(1 day before the event)

Prakash Gaba MSTA ( London)

Monthly Chart Below: