Monday, January 7, 2013
Comparing BSE sensex 2008-2013 with 1992-1997
We are great fan of history and we keep working with different data sets of past to figure out what future has in store for us. We have analysed and worked on history of multiple indices/commodities - Dow, Nikkei, Hang Seng , Gold, Crude etc. going back to almost 100+ years of data in some cases. We noticed history keeps repeating. Lets check this with an example we gave before for our India BSE sensex.
BSE sensex closed at 19,784 on Jan 04, 2013. We attach a picture which compares current sensex period of 2008-2013 with that of 1992-1997.
If we check above picture we notice Sensex is broadly following path it made in 1992-1997. 2008 high of sensex was similar to 1992 sensex high of Harshad Mehta times. Similarly double top of 2010 was similar to top of 1994. Current move of sensex in 2013 looks similar to 1997 move which suggests triple top and uptrend up to Jun 2013?
As we wrote before some gurus think if currency depreciates we could see higher nominal level in Sensex which may create higher high crossing 21000 levels of 2008 and 2010 but we personally do not agree with this argument. We think currency make no difference to pattern which is why we are looking at Defty target of around 4200. However, Market is above every one so to make sure we get it roughly right we are going to watch rising trend line Sensex/Nifty made on monthly chart starting from June 2012. As and when this trend line gets broken all bullish bets should be closed even if some one gives us 9000 Nifty target :-).