INDIAN MARKET OUTLOOK !!! Dear all whatever I am going to write below is what I learnt from my mentor/guru in my entire journey in stock market till now, what I learnt is to always keep things in simple way when it comes to Technical Analysis.

I always avoid getting into too much complicated studies which are specifically designed for other countries/indices. When one can make good money only by simple analysis, then why to get ourselves involved in such complicated studies.

Below I am posting few charts which are simple and effective way to catch important bottoms and also to make some good money.

SENSEX and RSI Co-Relation

From the above chart we can clearly see that whenever RSI reaches into the shaded area SENSEX forms important short term bottoms and witnessed sharp rally from there onwards. Today also RSI entered in the same zone and Sensex bounced back strongly from there.

NIFTY Weekly chart and RSI Co-Relation

In the above chart we can clearly see whenever RSI comes in between 45-35 zone

it has made important bottoms, today also RSI came inside the above mentioned

zone and Nifty bounced back sharply from lows.

Only on one incident of 2008 RSI went below this range, in all other incident long

term bottoms being formed between this range only.

We may consolidate for next 1-4 weeks and then there are higher chances of

Nifty/Sensex giving sharp rally into new territory.

Now we will go into some other charts too through which we can easily gauge the

mood/sentiment of market.

SENSEX and INDIA VIX Co-Relation

India VIX also plays very important role to gauge the sentiments of market

participants. Since the inception of VIX in india majority it has traded below 40

levels except the late 2008 to early 2009 period when global crisis was going on

and Sensex and Nifty witnessed almost 63% price erosion.

Now in the above chart if we exclude the 2008-2009 period then major bottoms

post 2010 being made whenever VIX entered between 30-40 zone (highlighted

with arrows).

Today also INDIA VIX entered between 30-40 zone and made high at 35.57 and

then cooled off and closed at 26 levels which is well below above mentioned

zone.

DOLLEX-30 Index

The above chart is of Dollex 30 which is Sensex in dollar term. In the above chart we can clearly see that dollex 30 retested today almost the Election Day breakout levels around 3100 and from there it has witnessed sharp recovery in it.

If a level of 3100 holds then we may see some sharp rally in next few months up to 3700 odd levels.

Disclosure – Have vested interests and invested in markets with longs so my views can be biased. Do your own research and risk management.

“There is always room for improvement”.

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Ameeth Vorra