History of Bombay Sensitive  Index
1999

20th December: 5,600 still looks good, as does volume

29th November: Everything appears on course. Volume last week was good.

Current prediction

Short range target: none

Medium term: none

Long term: Double bottoms
1. Daily chart pointing to around 5,600 - good volume; and
2. Weekly points to 5,900

Currency: none

22nd November: Thanks to one of the visitors to this page, we now have a volume figures which confirm our target of 5,700 or thereabouts.

Current prediction

Short range target: none

Medium term: none

Long term: Double bottoms
1. Daily chart pointing to around 5,600 - good volume; and
2. Weekly points to 5,900

Currency: none

15th November: The index has rebounded above the neckline of our triple top, cancelling the pattern. We can now hope for the long term resistance at 5,000 to break again, this time decisively.

8th November: After a steep fall, the index rebounded at a point that could mark the neckline for our double bottom pointing to 5,800. But the index needs to break 4,650 or 4,700 to be confident that our triple top will be cancelled.

Current prediction

Short range target: none

Medium term: triple top points to 3,950 - but it will be cancelled if the index rallies above 4,700.

Long term: Double bottoms
1. Daily charts: pointing to 5,200 and 5,800; and
2. Weekly points to 7,500

Currency: none

25th October: Our target of 7,500, as shown on the long term weekly chart, is cancelled. Hope for the long term is good. But we could see a pullback to 4,400 or 4,300 before the bull takes command again.

Current prediction

Short range target: none

Medium term: none

Long term: Double bottoms
1. Daily charts: pointing to 5,200 and 5,800; and
2. Weekly points to 7,500

Currency: none

11th October: The index broke the weekly resistance at 5,000. Our double bottom of 7,500 is confirmed. As this is a long term prediction, it would be well to wait a week or two to confirm that the market isn't making a sneaky little top. Confirmation could come in the form of a further rally, pullback to 5,000 and turn up.

Current prediction

Short range target: none

Medium term: none

Long term: Double bottoms
1. Daily charts: pointing to 5,200 and 5,800; and
2. Weekly points to 7,500

4th October: The big resistance at 5,000 remains unbroken, but otherwise, the index is on track for our targets.

27th September: The index turned up after falling to good channel support. But 5,000 is still a strong resistance.

13th September: The market is now poised to test the 5,000 level. If this point is crossed on a Friday close, we will have a valid target of 7,500.

30th August: The index is approaching weekly resistance at 5,000. If that breaks, we should see a target of 7,500.

23rd August: 4,800 promises to be a strong resistance. But a break on the weekly chart above 5,000 could see a target of 7,500.

2nd August: The short term is ambiguous. But the long term still looks good. The long term fund chart has made a very fine pullback and turn on the neckline, confirming the long term reversal. All we need now is a bit more volume.

12th July: The index has broken a long term weekly pattern pointing to 5,900.

Current prediction

Short range target: Pakistan

Medium term: reverse head and shoulders points to 4,800

Long term: Double bottom points to 5,900 - valid

28th June: All targets are still valid and the patterns looks good, despite political uncertainty.

Current prediction

Short range target: Pakistan

Medium term: reverse head and shoulders points to 4,800

Long term: Double bottom points to 5,200 - valid

21st June: The index is now sitting under long term resistance. But for the political uncertainty, I would be very bullish about the market. But with that missile whirling around, I feel a bit nervous.

14th June: The index is still in safe territory. But a fall below 3,900 will again put our targets in risk.

Current prediction

Short range target: Pakistan

Medium term: reverse head and shoulders points to 4,800

Long term: Double bottom points to 5,200 - valid

Currency: none

7th June: After a bit of volatile behaviour, our bull has returned to safe territory. Next test will be at 4,200, then 4,500 and then 4,600. The long term resistance-cum-neckline is currently around 4,200. If this breaks, we will have a valid target of 5,900. All of this looks quite promising, provided no accidents. But with pandemonium in the Himalayas and elections forthcoming, nothing would surprise.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 4,800

Long term: Double bottom points to 5,300

Currency: none

31st May: The index took a tumble last week, putting our prediction of 4,800 in doubt. The fund chart still looks good, as does the weekly chart.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 4,800 - questionable

Long term: Double bottom points to 5,300 - questionable

Currency: none

24th May: The index is behaving nicely. Good chance for higher targets of 4,800 and 5,300 to be met in the next few months. Resistances at 4,300 and 4,600.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 4,800

Long term: Double bottom points to 5,300.

Currency: none

10th May: India is a market of  wedges. Last week you might recall the index fell below our reversal pattern neckline putting in jeopardy our target of 4,100. However, a wedge appeared to offer hope that the target could be revived. And our dear little wedge did not fail us. The index broke out of the wedge and shot ballistic to our wedge target.

Sadly, the wedge target brought the index merely to a resistance zone. The reversal pattern pointing to 4,100 gives a high probability that the resistance will be passed. But we need to see the index pass 3,900 before we can confirm our target of 4,100.

"Too late" you might say. What's the point of waiting till the market gets to 3,900 before confirming a target of 4,100? Indeed, the target of 4,100 is only now of academic interest. Of greater concern is a larger double bottom. If the index breaks the 3,900 resistance we can confirm the higher target of 5,100, which, if reached, will confirm an even higher target on the weekly chart of 5,900.

The 4,000 level will thus be an important indicator for a new bull run. The rebound last week and the valid target of 4,100 suggest that the market is indeed heading for 5,900.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to somewhere between 4,100 and 4,300 - valid again

3rd May: The index fell below the neckline of our reversal pattern, putting the prediction on hold. But there are signs that market could recover and the prediction could be reinstated.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to somewhere between 4,100 and 4,300 - on hold.

26th April: No major change from last week The index is still looking safe. The fund charts both confirm a pullback to the neckline of a reversal pattern.

19th April: The market rebounded after touching the neckline of a double bottom, confirming the target at 4,100. There is resistance at 3,700 to 3,900.

14th April: The index has pulled back to the neckline of our reverse head and shoulders pattern. If the index turns up on the neckline, it will have a good chance of getting to target at 4,100. But it must first pass resistance at 3,700 and then 3,900.

26th March: The index is pulling back to the neckline of our double bottom. If it rebounds at this point, we will have further confirmation of the pattern and the prediction of 4,300.

Current prediction

Short term: none

Medium term: reverse head and shoulders points to 4,300

Long term: none

Currency: none

22nd March: The market can be expected to hit 4,300 if the resistance at 3,950 breaks.

15th March: The mysterious Mumbay market has finally revealed that the Bull has been in charge all along.

8th March: The index broke out of a reversal pattern, cancelling all bearish projections and giving a target of 4,300.

Current prediction

Medium term: reverse head and shoulders points to 4,300

Monday 1st March: The index surged today, but only as far as the long term daily resistance at 3,500. Thus the bearish predictions are still valid. However, a further rally will give a bullish scenario.

Current prediction

Short term: none

Medium term: triangle pointing to 1,200. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid.

Currency: none

15th February: One of the funds has broken a long term resistance. Otherwise, nothing new to report. The long term trend is still down.

8th February: No clear signs that the index will escape from it's current bearish prediction. Crucial support is still at the 2,700 level, which is a long way off.

Current prediction

Short term: none

Medium term: triangle pointing to 1,200. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid.

Currency: none

1st February: One of the funds has broken a long term resistance, while another has turned on resistance. The index has done nothing exciting.

Current prediction

Short term: wedge pointing to 3,500 - done

Medium term: triangle pointing to 1,200. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid.

Currency: none

25th January: The long term pattern pointing to 1,200 is still valid. But the funds suggest that the market has more short term upside.

Current prediction

Short term: wedge pointing to 3,500 - done

Medium term: triangle pointing to 1,200. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid.

Currency: none

18th January: The index reached our target of 3,500 and turned. The triangle pointing to 1,200 is now the major force on the index chart. But the fund charts have higher targets, suggesting that there could be more upside for the market.

Current prediction

Short term: wedge pointing to 3,500 - done

Medium term: triangle pointing to 1,200. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid.

Currency: none

11th January: The index is approaching our short term possible target of 3,500. One of the fund charts suggests that there could even be more upside.

Current prediction

Short term: wedge pointing to 3,500

Medium term: triangle pointing to 1,200. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid.

Currency: none



1998

21st December: Nothing much this week.

14th December: The index is making a falling wedge, which could give some short term relief to the market. However, the medium term prediction is still bearish.

Current prediction

Short term: none

Medium term: triangle pointing to 1,200. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid.

Currency: none

7th December: The index is still clinging to the support at around 2,700. If this breaks, we can consider our target of 1,444 highly likely.

Current prediction

Short term: none

Medium term: triangle pointing to 1,200. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid .

Currency: none

4th November: The index is sticking to the neckline of a big head and shoulders top. It hasn't broken yet. So there is nothing to report.

Current prediction

Short term: none

Medium term: head and shoulders top pointing to 1,350. But it will not be confirmed unless the support at 2,700 breaks.

23rd October:  The crucial support at 2,700 is still holding, even though the index has broken out of a medium term head and shoulders top pointing to 1,350. We should see the support break before confirming the pattern.

Current prediction

Short term: none

Medium term: head and shoulders top pointing to 1,350. But it will not be confirmed unless the support at 2,700 breaks.

Long term: Triangle pointing to around 1,444 (logarithmic) is valid .

Currency: none

12th October: The index is adding symmetry to our long term head and shoulders top. A fall below 2,700 would confirm that the long term trend is down.

5th October: The index has lost some of its short term strength. It could go either way in the short term.

21st September: A small double bottom took the index up last week, breaking through the medium term resistance.

21st September: Another bearish pattern. This time the long term weekly chart points to 157.

14th September: The index ended last week on stiff resistance. We are likely to see falls this week.

Current prediction

Short term: none

Medium term: Medium term head and shoulders points to 1,450 - not yet broken.

Long term: Triangle pointing to around 800 is valid again.

24th August: The index is still hovering above the neckline of a big fall. But the weekly charts suggest that the fall is imminent.

Current prediction

Short term: none

Medium term: Medium term head and shoulders points to 1,450 - not yet broken.

Long term: Triangle pointing to around 800 is valid again.

Currency: none

12th August: The market looks to be heading down to 1,600. But the neckline of a head and shoulders at 2,850 must first break.

Current prediction

Short term: none

Medium term: Medium term head and shoulders points to 1,600 - not yet broken.

Long term: Triangle pointing to around 800 is valid again.

Currency: none

3rd August: The index could be making a shoulder with support at 2,900. Otherwise nothing much going on.

27th July: The market has turned on the medium term resistance as expected. There is no clear bearish pattern. But the short term rally appears to be over.

22nd July: The index rallied quite substantially over the past two weeks. But the rally could be merely a little shoulder that one might expect before a further plunge. Stiff resistance at the current level will tell.

A little triangle points up to 3,700. But the Bombay market is one that follows long term resistances and supports more than it does little geometrical patterns. So I am not confident about 3,700.

Current prediction

Short term: triangle pointing to 3,700

Medium term: None. Let's say on hold pending further evidence:

Long term: The triangle pointing to 1,600 is on hold. The long term trend is still up.

14th July: The index performed a surprising recovery above the necklines of all bearish patterns. The trend is still down. So I wouldn't break open the piggy bank yet. But there is no clear indication of the low targets of last week.

Current prediction

Medium term: None. Let's say on hold pending further evidence: Double top or triangle pointing to 2,150 logarithmic; 1,725 arithmetic.

Long term: As above, on hold: triangle pointing to 1,600.  Short term weekly shows a double top broken with a target of 2,000.

6th July: The long term support has broken, leaving no hope for the index. It looks set to fall to somewhere between 1,600 and 2,150.

Current prediction

Medium term: Double top or triangle pointing to 2,150 logarithmic; 1,725 arithmetic.

Long term: triangle pointing to 1,600.  Short term weekly shows a double top broken with a target of 2,000.

29th June: The index is in danger of a plunge to the low 2,000 level. There is good support on the long term weekly chart. But the short term weekly shows a double top already broken.

Current prediction

Short term: none

Long term: triangle pointing to 1,600. But the long term support should break before the pattern can be confirmed. Short term weekly shows a double top broken with a target of 2,000.

22nd June: The index is now resting on the weekly long term support. If this support does not hold, there is a strong probability of further falls.

Current prediction

Short term: none

Long term: triangle pointing to 1,600. But the long term support should break before the pattern can be confirmed.

1st June: The direction of the market is still a mystery. The fund chart paints a hopeful scenario. But the rupee is in a weakening trend.

25th May: If ever there was a wedge market it is India. I watched last week as a head and and shoulders top broke, failed, turned into a wedge and broke out of the wedge. Check out the fund chart for a clear example. The wedge breakout suggests that previous highs will be tested.

18th May: The market fell out of a head and shoulders top but is contained on a strong support. The Rupee took a dive but is, at present contained. It remains to be seen whether the international sanctions can reverse the current trend or whether they merely provide the opportunity for a bit of a correction.

Current prediction

Short term: double bottom pointing to 4,400. But the index rarely reaches target. Both the fund charts have passed target. So I guess we should not expect the index to get to 4,400.

Long term: none.

4th May: The index is resting on reasonable support. But there is no clear direction at the moment.

Current prediction

Short term: double bottom pointing to 4,400. But the index rarely reaches target. Both the fund charts have passed target. So I guess we should not expect the index to get to 4,400.

Long term: none.

20th April: The index is likely to consolidate at the current level. Funds have reached their short term targets. More time for further direction is needed.

11th April: The BSE does not usually reach targets. Resistances (or supports) usually intervene. But in the present case, there are no major resistances before target.

Current prediction

Short term: double bottom pointing to 4,400.

Long term: none.

20th March: The weekly chart has broken out of a double bottom, pointing to 4,200. A breakout on the daily chart will give a target of 4,400.

Current prediction

Medium term: double bottom pointing to 4,200.

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000. These patterns are valid until the market moves above 3,800.

16th March: The index is struggling around the neckline of our double bottom at 3,800. All of the charts show this pattern, which could point up to 4,400 and beyond. But there is still a medium target pointing down which has not been cancelled.

Current prediction

Short term: none

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000. These patterns are valid until the market moves above 3,800.

9th March:  The market could be making a double bottom. A break above 3,800 will confirm the move to 4,400.

Current prediction

Short term: none

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000. These patterns are valid until the market moves above 3,800.

2nd March:  More patterns point to our target at around 3,800. Now there is hope that the index will be heading higher, to 4,500 again. But it is still too early to say and our bearish omens pointing down to 2,000 have not been cancelled.

Current prediction

Short term: falling wedge pointing to 3,700 or 3,800. Triangle and a reverse head and shoulders suggests that same phenomenon .

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000.

23rd February: A triangle broke out upside in the short term chart last week, confirming our hopes for short term gains.

Current prediction

Short term: falling wedge pointing to 3,700 or 3,800. Triangle suggests that same phenomenon .

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000.
10th February: The index looks to be making a short term reversal pattern. The long term is also still in uptrend. But the medium term is bearish. The crucial support is 3,200.

Current prediction

Short term: falling wedge pointing to 3,700 or 3,800.

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000.

31st January: The 3,300 support broke. The next stop is 2,700. But the long term support could intervene.

Current prediction

Short term: support at 2,700

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000.

26th January: The index inched back to the neckline at 3,300 last week This is a critical point as it marks the neckline of a head and shoulders top pointing to 2,000. The currency made a good recovery last week. But the trend is still down.

Current prediction

Short term: support at 3,300.

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000.

19th January: 3,300 marks the neckline of a new head and shoulders top. If this pattern breaks, we will have a target of 2,000.

Current prediction

Short term: support at 3,300.

Long term: cascading head and shoulder patterns: first target is 2,900; second, if 3,300 fails, is 2,000.

12th January: The index turned as expected last week. Support at 3,300. Currency was spared much of the carnage of the other regional carnage.

Current prediction

Short term: support at 3,300.

Long term: cascading head and shoulder patterns: first target is 2,900; second is 2,000.

5th January: The current rally is facing tough resistance at 3,700 and 3,800. A turn now could be send the index to lower lows. But there is a nice channel forming on the weekly chart that could explain the current resilience of the market and might possibly portend further rises.

The currency is also turning on resistance and looks likely to weaken.

Current prediction

Short term: resistance at 3,650 and 3,700 could reverse the current rally and create more shoulders.

Long term: cascading head and shoulder patterns: first target is 2,900; second is 2,000.



1997

29th December: The current rally is facing tough resistance that could be sending the index to lower lows. The currency is also turning on resistance and looks likely to weaken.

Current prediction

Short term: resistance at 3,650 and 3,700 could reverse the current rally and create more shoulders.

Long term: cascading head and shoulder patterns: first target is 2,900; second is 2,000.

22nd December: A bit of short term reprieve as the index heads up to the resistance at 3,700. The bearish omens have not disappeared.

Current prediction

Short term: resistance at 3,650 and 3,700 could reverse the current rally and create more shoulders.

Long term: cascading head and shoulder patterns: first target is 2,900; second is 2,000.

13th December: Another head and shoulders has broken, pointing to 2,200. But India is not easily predicted, and the long term might intervene.

Current prediction

Short term: a head and shoulders with rising neckline pointing to 2,200.

Long term: support at 3,500 and 3,200. But if the index falls below 3,400, a new head and shoulders points to 2,200. The support at 3,200 is unlikely to let this happen. But who knows.

8th December: Support at 3,400 is the last chance to avert a fall to 3,000. The long term support looks good. The fund does not.

Current prediction

Short term: a head and shoulders with rising neckline pointing to 3,000.

Long term: support at 3,500 and 3,200. But if the index falls below 3,400, a new head and shoulders points to 2,200. The support at 3,200 is unlikely to let this happen. But who knows.

1st December: The market rebounded a bit last week, but it was just a pullback. Nothing to get excited about. The Rupee has followed its neighbours south. It lost about three percent last week.

Current prediction

Short term: a head and shoulders with rising neckline pointing to 3,000

Long term: support at 3,500 and 3,200.

17th November: Poor old India happens to be in Asia and is therefore suffering the malaise. Support at 3,500 on the weekly chart, failing which down another ten percent to 3,200.

The head and shoulders below, with rising neckline points to 2,900. But I don't like rising necklines.

Current prediction

Short term: a head and shoulders with rising neckline pointing to 2,900 - unlikely due to rising neckline. Supports all over the place.

Long term: support at 3,500 and 3,200.

20th October: All signs are positive as the falling wedge proceeds according to expectations. We now have a little reverse head and shoulders that could propel the index towards its testing point at 4,600.

Current prediction

Short term: falling wedge shown in green (short term) portends a rise back to at least 4,600. Resistance at 4,100.

Long term: possible triangle breakout, target at 6,800, failing which, no support before 3,200.

13th October: The long term prospects appear brighter as the index fulfills the falling wedge expectations (up) and the triangle breakout becomes clear.

Current prediction

Short term: rising wedge shown in red line portends a rise back to at least 4,600. Resistance at 4,100.

Long term: possible triangle breakout, target at 6,800, failing which, no support before 3,200.

6th October: A small fall last week. Nothing much to worry about yet. Supports are all good. Possible descending triangle in one of the funds provides cause for a little caution.

Current prediction

Short term: rising wedge shown in red line portends a rise back to at least 4,600

Long term: possible triangle breakout, target at 6,800, failing which, no support before 3,200.

26th September: The market broke out of a rising wedge which portends rises, at least to the level of the last high. On the other hand, one of the fund charts shows a head and shoulders top forming, which would spell further falls.

Current prediction

Short term: rising wedge shown in red portends a rise back to at least 4,600

Long term: possible triangle breakout, target at 6,800, failing which, no support before 3,200.

22nd September: The short term picture appears to show a falling wedge. This pattern indicates that falls would be limited to around 3,700. The long term chart shows the current weakness as a pullback.

1st September: Last week the index continued to fall. Our prediction of 5,800 is therefore cancelled. According to the long term chart, the index could fall to 3,200 before finding firm support. However, the current pattern on the long term chart could also be a gigantic triangle, of which the current slide might be a mere pullback. Check out the long term picture. Short term and fund charts show support at the current level.

Current prediction

Short term: good support at the current level

Long term: possible triangle breakout, target at 6,800, failing which, no support before 3,200.

25th August: The index disappointed last week as it fell through the 4,100 target. However, both the short term index trend channel and the fund chart show good support. But further falls this week will cancel our prediction of 5,400.

Current prediction

Short term: good support at the current level

Long term: Double bottom stretching over three years, with a target of 5,400. On hold this week, as we await further direction.

8th August: The index has now made two nice pullbacks to the neckline of the long term double bottom. It closed last week on the support of its rising channel. It is now ready for a nice rise to 4,700.

Current prediction

Short term: Weekly chart shows resistance at 4,700.

Long term: Double bottom stretching over three years, with a target of 5,400. Note that there are no volume figures for this market.

11th August: The index is moving up nicely in a channel. It turned, as expected, at the point where the medium resistance intersects with the short term resistance (about 4,550). Expect it to hold on 4,300.

4th August: The index is behaving according to prediction, gaining nicely last week after having pulled back to the neckline of our long term double bottom. Check out the long term chart.

Current prediction:

Short term: a bit of resistance at 4,600, corresponding with the triangle prediction shown in green. (Note that the first pullback occurred right on the reverse head and shoulders target, shown in orange.)

Long term: Double bottom stretching over three years, with a target of 5,400. Note that there are no volume figures for this market.

28th July: As expected, the index turned close to the neckline at 4,100 and appears to be heading up. The blue channel is holding nicely.

20th July: No cause to run for cover. The index is merely pulling back to the neckline of our double bottom. Both charts show this phenomenon.

14th July: The weekly chart shows a bit of resistance.

8th July: Nice confirmation of breakout on the weekly chart.

Current prediction: a bit of resistance at 4,800.

Long term: Double bottom stretching over three years, with a target of 5,400. Note that there are no volume figures for this market.

29th June: The index broke out of a long term double bottom pattern. We now have a cautious target of 5,400, remembering that volume figures are absent for this market.

Current prediction:

Long term: Double bottom stretching over three years, with a target of 5,400. Note that there are no volume figures for this market.

20th June: As expected, the index is struggling on 4,100.

Current prediction: A reverse head and shoulders with a target of 4,400 or a symmetrical triangle with a target of 4,600. Strong resistance at 4,100 shown on the weekly chart. Note that the triangle has broken out close to the apex. This is sometimes a sign of weakness or an end-run, but not so for a reverse head and shoulders.

Note also the possible long term double bottom that a break above 4,100 would entail. This would give us a target of 5,400. A close above 4,200 (to be safe) on the weekly chart would confirm it (if confirmation is possible in India - no volume figures).

16th June: The index surged nicely last week, after it broke out of the reverse head and shoulders - cum - triangle last week. However, we shall be expecting strong resistance at the 4,100 level. Even the Fibonnaci Biryani Effect should take the index above this point. But with two disappointments with head and shoulders predictions in this market, we should urge a modicum of caution.

9th June: The index broke out of a pattern last week. It could be a reverse head and shoulders or it could be a triangle, depending on volume, which we don't know. If it is a triangle, we have a target of 4,600. If its a reverse head and shoulders, we have a target of 4,400. In either case, the index must overcome the strong resistance at 4,100.

2nd June: The weekly chart showed a good turn on support last week. The fund is making a reverse head and shoulders, as yet unbroken.

26th May: Nothing new. The long term chart shows good support at 3,700. The fund chart is showing a reverse head and shoulders while meandering in its channel.

8th April: So much for our reverse head and shoulders. I told you they don't work in this market. At best we have a rising channel.

28th March: Nothing exciting last week. Just a bit of consolidation around the neckline.

17th March: Last week we saw a pullback and consolidation to the neckline of our reverse head and shoulders. A good time to enter the market for those who want to take the risk in this weird market.

0th March: A little pullback occurred last week. We have a nice reverse head and shoulders pattern. The neckline is shown by the green broken line. Subject to the argument below, the index may reach 4,700.

However, there will be strong resistance at 4,100, as shown by the long term chart.

Note: Big patterns have not worked in this market. The head and shoulders pointing to 2,500 did not reach its minimum (blue arrow). Hence the reverse head and shoulders pointing to 4,700 may be flawed. The reason is that volume figures are not provided for this market. These figures are essential for making predictions.

3rd March: Last week the index broke our neckline at 3,700. We now have a pattern that constitutes part of a reverse head and shoulders. But remember, we are half in the dark with Bombay. We don't know the volume picture and so we cannot predict with confidence. If the volume picture supports the pattern, we can expect a minimum target of 4,700.

14th February: The right shoulder discussed in previous weeks is still forming. But without volume figures for this market, it's not clear whether we have a reverse head and shoulders building up around the green broken line. If volume is picking up and if the index breaks the 3,700 mark, we will have a target of around 4,700. Note that the long term picture shows that head and shoulders have not worked in the past.

3rd February: The right shoulder of a reverse head and shoulders appears to be forming between the broken blue and green lines.

27th January: Nothing much happened last week. A small triangle or pennant perhaps. Consolidation on support. We still have to see if the right shoulder, discussed last week, is forming.

20th January: The mysterious BSI might be making a right shoulder of a reverse head and shoulders. The neckline would be the thick green rising broken line. The BSI is a mystery because we don't have volume figures. Volume figures might explain why our head and shoulder objective of 2,500 wasn't met. Without volume we would be better off consulting a sadhu (holy man who walks around in a loin cloth).

The fund above worked.

13th January: The index broke through the neckline of its head and shoulders. I am reluctant to offer predictions on the basis of the index chart. It doesn't seem to respond well to our analysis. Fund charts, on the other hand, appear to respond well.

In crude terms, 4,100 will be a major resistance.

4th January: A strong rise last week would make one think that the Bombay index has recovered from its primary bear phase. A confusing picture here. None of the minimum targets in the index chart has been met.

However, we have included two different India fund charts. Both of these have fulfilled the minimum downward targets. These charts would suggest that the bear phase is over.

The long term index chart also shows a nice double bottom at 2,700. (I'll try and include this chart next week.) This would also suggest that the index is trending up for more than a few weeks.

So where is this index heading? Difficult to hazard a guess. Remember, no volume figures are reported for this market. That removes an essential ingredient of our theory. We could be getting a reverse head and shoulders forming. But when the main head and shoulders didn't work, I wouldn't bet too much on another one.



1996

30th December: Nothing new. Read last week's comments below.

23rd December: The index broke above the 30 day moving average last week. The minimum target of 2,500 hasn't been touched. And there is no reversal pattern to suggest that the index is doing more than a minor correction.

Note: no volume figures for Bombay. Therefore we do not have the whole picture for this market. Our hypotheses are therefore speculative. But it looks like a head and shoulders in this index and our bet is still on the 2,500 target.

16th December: The index is continuing its fall towards 2,500. The pull back last week should not distract us. If the current rate of downtrend continues, the index should reach its target at around the end of January, 1997.

10th December: The index is winding its way down to the target.

25th November: The break out downside from this perfectly formed symmetrical triangle shows a target of around 2,500.

November 18th: symmetrical triangle still forming. No indication of direction yet.

India is suffering from a head and shoulders not show on this chart. The broken line shows the neckline. Last week, the index pulled back to the neckline. It was quite a dramatic rise with one day recording a gain of 3%. However, it turned on that rising neckline and looks like it's heading down again.

No volume records are kept for India. So we're not sure that this pattern is valid. The pullback to the neckline makes it look valid. If it is a head and shoulders, our target is 2550.
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