In this post I just want to reflect on my past calls and how markets have made the text book patterns as predicted by me in my previous post. Let us look at the chart of crude I have pasted in my previous article on June 03, 2011. In this post I have mentioned that crude oil is forming an head and shoulder pattern and in future it may shape out like this.
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| Old crude chart as on June 3, 2011 |
This is what happened in crude oil. We can see that the price pattern behaved in the typical manner and crude completed the right shoulder and then cracked to 75 levels.
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| Crude Chart as on August 18, 2011 |
Let us look at the following Nifty chart pasted by me on MAY 3, 2011. We can see that in the given chart I have predicted that Nifty will complete the right shoulder and will crack to 4700. Today Nifty closed at 4940 and it’s worth nothing that Nifty at that time was trading at 5600 levels.
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| Nifty chart as on May 3, 2011 |
We can see that nifty also complete a text book head and shoulder pattern and had given a perfect breakout. The target for current break out comes at around 4500 levels.
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| Nifty chart as on August 18, 2011 |
Before ending this post I would like to address few of my friend who despises technical analysis. It’s true that Technical analysis is not a science but so are fundamental analysis, valuation methods and economic forecasting. Infact economics itself is based on assumptions most of which do not exists. The reason why most of the technical analysts are wrong so often is because they see their own biases in charts. Instead of reading the charts with a pure mind they mostly see what they believe in or what to believe in.
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