The First chart is the market top of 2008 and the second one is the formation as of now. The top formation of 2008 started from October 2007 and ended in January 2008 total 4 months. the current formation has just compleated 13 months( fibonacci again). It can be seen from the above two charts that the pattern is some what similar we can say that virtually similar.

The similarities are give below

1. In the first chart, the formation is sloping upwards and now also the formation is sloping upwards.
2. The first chart there are six waves formation after which the markets have corrected voilently and you know what has happened and its a history now. In the second chart which is the current one there are also six waves and we are in completion of the sixth wave
3. Last time the markets broke down wards after completion of the sixthed wave,whether the market would follow the same pattern it followed in january 2008 after completion of the pattern. It appears from the chart that we are in the final stages of completion of the of the sixth wave so be cautious.
4. Please also note the similarities of the each waves, in the first chart all the rises were in the range of 127% to 147% ( to be precise 147%,127% and 136%) of the previous waves. In the present case it is between 162%,123% and 115( not yet confirmed the completion.)
5. In the first case each fall is around 65% of the previous rise, and in the current case the falls are in the ratio of 40% and 82% of the previous fall.
6. If this pattern of the rise is to be followed we might see the 6th or the current up wave to move more that 123% of the previous down wave( which was of 613 points). So we should rise more than 753 points so nifty should atleast move above 5539. You may be worndering why? in the jan 2008 formation second rise was the shortest so now also the shortest one is the second up wave which is 123% so the third wave should be more than that.

We have to see whether the market would replicate the structure of the previous top formation or not. The pattern is suggesting the same but as the motto goes market is the king. The market is pointing towards one thing at present and i have just presented my view.

what ever side may be the break out the movement after the same would be very very voilent which is very difficult for any body to comprehend. So the patterns are suggesting us to be cautious. So just do that.

M.Sri Mahidar

Trend is friend.