In 19 May post, I had mentioned few dates and price levels to watch on NIFTY. I expected NIFTY to touch 4812 (by 7th June) before it could resume its upward journey. Today, NIFTY touched a Low of 4786 breaching my target of 4812.

NIFTY is in weak position now. Next few support levels that I would look for are 4767 (very strong support), 4675 and then 4538.

Looking at recent market movement, the possibilities are that NIFTY makes a Double Bottom at 4675 on 4th June 2010. Bear in mind, 4th June is a Friday.

How I am working out this date?

It went up 724 points in 58 days to 5399.7 on 7th April, 2010 from 4675 on 8th Feb 2010. 50% of this range in points and days is 362 points and 29 days (@ 12.50 per day). This gave us a target of 5037.50 on 6th May 2010 (calcualting from April 7 2010 Top). NIFTY day LOW for May 6, 2010 was 5037.75. Pretty close, isn’t it.

Adding 58 days to 7th April and reducing 724 points, gives us 4 June 2010 and 4675 price target.

If you check the days today from 7th April, 2010, it comes to 48 days and 614 points. A rate of 12.75 per day! Pretty close.

All above calculations may be confusing. And may be a little overwhelming. But these are aimed at demonstrating one point. HISTORY REPEATS, The fundamental belief on which Gann techniques and calculations are based.

I have proved these to my satisfaction many times. You may want to prove it to yourself, to your satisfaction.

Please also note, 5037 is now a resistance. Floor has now become the ceiling (refer to a previous post on Stock market terms which has information on Supports/Resistance).

Stay away from Buying for long term in this market, at least till 4th June, 2010. I may be wrong, but remember, it is better being profitable, than being right……….