See the inlaid chart(daily), after initial hesitation, the index broke the falling parallel channel on 29th Dec 08(3554) showing first sign of strength. Today the index kissed 3740(second stage confirmation), our long standing key reversal level, but closed below it. Expect continuation of this corrective rally, provided it successfully trades/closes above 3740. In such eventuality the revised target for the bulls is placed near about 4k.
On the weekly chart, the Index had given upward break from the falling parallel channel (blue) & now trading well above the same, confirming our short to medium term corrective bullish view.
As anticipated, the index had taken good support in the previous consolidation area(3400) on the Monthly chart. As long as it holds, the bulls will get an opportunity to muster the strength; however anything below it will be disastrous.
Further on the quarterly chart the index has taken good support on the trendline drawn since Mar 91. Now this trendline will act as a guiding force for the bulls in the next few quarters. Value for the current quarter(Mar09) is around 3.4k, a meaningful stop for the trend following investors.
In short, the bulls are in comeback mode, but the rally is corrective in nature rather than fresh bull market. Observe stop of 3.4k (for investors) & 3.6k (for traders). If able to close above 3740 then we could see 4k within next few weeks. As far as long term structural bear market is concerned, there is no confirmation (lac of consolidation pattern/faster retracement of last leg etc) to conclude the worst is over; & as such possibility of retesting the recent low is open, but may not immediately.
On the weekly chart, the Index had given upward break from the falling parallel channel (blue) & now trading well above the same, confirming our short to medium term corrective bullish view.
As anticipated, the index had taken good support in the previous consolidation area(3400) on the Monthly chart. As long as it holds, the bulls will get an opportunity to muster the strength; however anything below it will be disastrous.
Further on the quarterly chart the index has taken good support on the trendline drawn since Mar 91. Now this trendline will act as a guiding force for the bulls in the next few quarters. Value for the current quarter(Mar09) is around 3.4k, a meaningful stop for the trend following investors.
In short, the bulls are in comeback mode, but the rally is corrective in nature rather than fresh bull market. Observe stop of 3.4k (for investors) & 3.6k (for traders). If able to close above 3740 then we could see 4k within next few weeks. As far as long term structural bear market is concerned, there is no confirmation (lac of consolidation pattern/faster retracement of last leg etc) to conclude the worst is over; & as such possibility of retesting the recent low is open, but may not immediately.
