The above strategy seems to be working every year, the July part may not be always true but still the history tells that the May month is one of the worst months of the year for stock markets. May month also has some spill-over effects on the month of June, so May coupled with June itself is a dreadful sign for markets.
If you look at the charts,this green box may look like an ordinary one but in reality it is so important that it may turn out to be a "bottom-decider". As you see we have always made a higher bottom to propel further to make a new high. In this current fall, previously i mentioned that 4800 will hold so markets did an exact u-turn from 4800 and gave a sharp bounce back till 5100. Now as global situations worsens further, markets are expected to take a hit on them. If the fall due to world markets gets arrested in this green rectangular box then we may be in safe hands and can say " ALL IS WELL ", but if this rectangular box is broken on a daily/weekly basis then expect 4500 to come. Why this rectangular box is important? Answer: 1) Even if 4800 ( our intermediate bottom ) gets broken and there is a bounce back from any level above 4700 that qualifies as a higher low as our previous low was 4675.2) Even if we touch 4675-4700 and bounce back sharply still there will be no problem as it will be defined as a " double bottom ". But if it breaks 4675-4700/green box on a weekly/daily closing basis then " ALL MAY NOT BE WELL ".
Have a nice day
Regards
Ankit
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