Can someone throw light on how to find a market bottom from charts? Does bottom can be confirmed through combination factors like sensex, nifty chart pattern or/and individual leaders stock chart patterns?
It is a very difficult question, nobody can definitely predict it!
This is a science of probablities where you predict the behavior of MASS.
It is said there is more money to made in-between rather than predicting bottoms and tops!..There is more MEAT to eat in between rather than at ends!
Few signals to look are (what I can remember from top of my head)
- Change in Trend, defined by Higher highs and Higher Lows!..Example: Infosys as of now
- Completion of 61.8 % retracement, but then it may even bounce earlier levels too.
- Retracement of price to 50 EMA atleast 3 times, should make you cautious about a reversal!
- Change in direction of 50 EMA.
- Crossover of 50 EMA above 200 EMA with good volume!
- Appearance of reversal pattern after extended down trend!
- Improvement in sentiment for banking sector, it is always ahead of market recovery or failure!