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.
![Displaying NSE Nifty monthly.JPEG](https://mail.google.com/mail/u/0/?ui=2&ik=a350bbd058&view=fimg&th=15a2d010244caab5&attid=0.1&disp=inline&realattid=ii_15a2c8e6d3c3faab&safe=1&attbid=ANGjdJ_mrCiz1eVcQ9T3IZI8WkAOPRbKvUKeXIsP2FSFQxmbu4oPAPo2HUHIRUWnlymjSoPIzwLGdBoQYK9hcr1Ol4oz9sEGcfDadkXcVXrydVuKwUkaHri7F0PCTcQ&ats=1486825652416&rm=15a2d010244caab5&zw&sz=w1600-h740)
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