DOJI, India, China and Thanks

First, my thanks for this comment  by mbn:

“Completed reading half of ur book. I liked it the way u tried to analyze wid out prejudice”

My post on the DOJI has evoked these questions by Nitin:

“1. Based on the DOJI and otherwise, do you see Nifty moving past 4800 in this series and where could the expiry be? 2. Does the DOJI suggest reversal of Bear market trend from a positional trader perspective”

My Notes:

The DOJI taken along with the NR7 and upbeat world markets tells us that an up trend may be starting. Once a trend starts (up or down) it can travel a lot of distance, so the Nifty could well cross 4800. I do not know if this will actually come about, but there is a fair probability. This is a DOJi that signifies the end of a minor down trend. It does not suggest reversal of the bear market. Bear markets end with lot of base building. We have not even started the process.

Unnath has some thoughtful comments on the prospects of a bull market in India, after we finish with the bear. He says

“….this year the Shanghai index has broken the previous lows made in 2009 and trading way below its all time highs. Similarly is it not possible that we see a rise in our market just because we fallen from 6300 to 4500 in 13 months and Nifty may come back and trade below 4000 or so for a long time like china is doing right now”

My Notes: Markets can do anything. For the Nifty to mimic the Chinese market will require (1) a break of the 2010 lows (we have done that), (2) A sideways range for 30 months (we are in the process of doing that, by mid year 2012 we will have achieved a range for 2 years).

For the Nifty to trade below 4000 for an extended period of time, we will have to see the Nifty fall to 3200 or near by. If this happens, 4000 will become resistance. Then a new range can probably develop below 4000. To me, this looks like an unlikely scenario. But, it is the Market which needs to decide.