ice continuum and facilitate an approximation of a particular phase/move in the market in terms of magnitude and duration. Fibonacci charts facilitate reasonably accurate projections of market tops and bottoms. They are suggesting a top, but not a trend reversal, in the middle of October. The computations were done using classic Fibonacci cycle system (not the Kondratieff cycle system), which has stood the test of time. Incase the 5708 level does become the short term top, the markets could test the 5240/5095 levels on declines in the coming weeks. It should be remembered that late stages of bull markets invariably see lots of volatility and impulse extensions are accompanied by triangles/pincer formations and explosive breakouts/draw downs. Trigger happy buying should be a no no in the near future. The impulse wave that began in June 2004 and ended in May 2006 covered 2336 points on the Nifty spot (3774 -1438 levels), whereas the current wave has covered 3113 points (5708 - 2595 levels). This leads us to project a target of 6,375 by Oct/Nov 2008 and for this to be achieved, it is crucial that the Nifty spot does not violate the 4300 - 4400 support band. The larger picture still remains positive. My view remains that it is possible to forecast the future. Fair disclosure: the analyst has long and short trading positions in the equity markets.
Vijay L. Bhambwani
(CEO- BSPLindia.com)