Wednesday

I have been very happy with the way FLDs have been working so far. I have explained about FLD's in earlier posts in detail - Keerthi please read the post I did on Sunday night with the charts. I have tried to make it as detailed as possible and also with examples so anyone can understand.

Pilot, 80 week lows, even though we dont have 100% confirmation yet, I think its very high probability we did set the low at 4650 odd. However how long this low will hold is another story. I did do posts earlier on this speculation recently. Hope you did not miss it.

Chandra, if it is the 80 week low, we will have upside - yes - but it does not have to happen very very fast. There will be backing and filling so form a good base. See Oct 2008 - Mar 2009 period to see what I mean. 2nd thing about FLDs..see its a cascade, this is why I was sticking with the 5050 target from beginning. See FLD cross, projects next cross, then that cross projects next cross and so on. So based on my rough calculation, I came up with those levels i.e if we close 4770, its extreme high probability that we get to 5050 with some resistance expected in b/w at 4850 area. This was shifted down from 4865 to 4845 as the FLD lines came down.

The formation of FLDs I described above is called an FLD cascade and it basically projects a good upside in the method I explained above. One by one.

Here is a look at the current view. As you can see, we are at the next FLD cross. So basically it is crossing today at 16100 Sensex (around Nifty 4830). Bottom at 15500. So difference is around 600 points = Approx 200 Nifty points. So adding this to 4830, we get 5030. So 5030-5050 is the current projection for the 2.5week FLD.



Now the market has run around 7 calendar days from the 4650 low. So we need to start looking out for the 2.5 week cycle now. I think we will top in the next 2 or 3 days and then maybe try a consolidation move into the 2.5 week low - this is however not likely to be a major low - we might try to consolidate at around 4850 area - in effect test this area from above. All speculation for now. For now we have the FLD outstanding target of 5030-5050. Then we see.

I might book profits today atleast partially and re-hedge the rest just to be on safe side.

Best,
Lee