Sunday, October 11, 2009

Sensex: Time cycles. Gann and Target zone, Hindalco: Probable path


Sensex is showing a very weak structure. We are expecting wave 5 of 5 to rally atleast till previous highs - 17200 but there is an increasing possibility of it being over 2 days back
We gave in our September 09 blog probable target for Sensex near 17450 levels. Sensex made a high of 17195 this week.
Prices are at kissing level from the trendline connecting March lows. If prices have to rally in 5th wave it has to be now else we might see an increasing downward pressure.
Global markets rally, Better than expected Infosys results and Reliance Ind declaration of Bonus issue failed to lift the spirit of the market. This is a warning sign!
A fall from here will also represent an important break of "Gann angle"
Time cycles (shown as vertical blue line) also suggest we are in danger zone!
We have shown Target Zone for Sensex and will evaluate this further based on price behaviour next week. We should still wait for confirmation before pulling the "short trigger" on Sensex.


In our previous blog we stated move down in Hindalco as a 3 wave move but a close observation on intraday charts reveal an impulsive 5 wave structure down. We will keep this as a preferred scenario for now and wait for further developments. If prices rallies from here till upper end of the channel i.e. near previous highs of 140 then we need to adopt alternate count shown in previous blog.
Wave 2 is now in zone of wave4 of one lesser degree of previous wave1. An ideal place for wave 3 to start!
Also we have shown probable path for next few weeks for target of 101. Prices should turn down now if it has to follow our probable path. We will evaluate the validity of this path as wave structure develops next week.

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