Monthly Engulfing Bear Candles

[Mayur Patel]

Sensex /Nifty spot is forming a engulfing monthly bear candle as of now. Although its premature to say that December month will form engulfing bear as we are just mid way in December, we shud see what has happened in previous years when a monthly engulfing candle has been formed. May 2006: Sensex corrects 30% from 12671 to 8800, Feb 2007: Sensex corrects 16% from 14724 to 12316, Jan 2008: Sensex corrects 30% from 21207 to 14677, Jan 2010: Sensex corrects 12% from 17790 to 15651, Jan 2011: Sensex corrects 16% from 20665 to 17295 & Now Dec 2014: Sensex corrects 6% (till today) from 28822 to 27105. Even if we consider minimum correction a monthly engulfing candle results in, its 12% from top. So 25365 Sensex (7595 Nifty) by January 2015 is quite a possibility. Only if by December end, Sensex manages to close abv 27950 (nifty abv 8350), that this monthly engulfing bear candle gets void. So watch out closing on 31^st December 2014 .

 
 
 
 
Regards,
 
Mayur K Patel
Branch Manager,
Sharekhan Ltd,
Ghatkopar Branch, Mumbai.