Indian markets - a panoramic chart analysis.

Indian benchmark indices are in a strong uptrend for past many weeks. But are we going to see this trend continuing? I predicted that markets will touch 9000 three months before Modi government’s victory in 2014 in another article in this blog based on the PE valuation of Nifty. http://www.phimantra.com/2014/03/are-we-on-everest-or-still-at-base-camp.html

Coming to my view, markets are at a juncture where they can make or break. On PE count markets are trading at a PE of 23.62 times. The all-time high PE was around 27 89 somewhere in 2008. Markets witnessed a rally from 4531.15 levels to 9119.20 levels. It retraced by exactly 50% of this rally and bounced with a vengeance. Again the magic of Fibonacci numbers. After testing 8968 levels in this rally markets again retraced nearly 50% of this second rally and bounced back. If we see the broader chart patterns of nifty there is January 2008 to March 2014 followed by a breakout and a second cup and handle pattern is in the making since March 2015. The handle for this pattern is in the making and the breakout for this pattern will be a closing above 9120 levels. This pattern will be void if market comes below 7890 levels.