Bottom Line: Sensex reached near 18000 in 15 days exactly as we were anticipating! Time Cycles cannot be more accurate than this…
Sensex Daily chart: Anticipated on 14th October 2011
Sensex: Time Cycles:
We mentioned previously on 14th October, “Everything is so systematic that it cannot be controlled or manipulated but humans by default exhibits this natural phenomenon and makes prices move within channel, following 15 days rally, that retraces 76.4% of fall, with each down leg having 3 waves, and each 3rd wave forming positive divergences!!!
If the same systematic approach continues the current rally is only in its 6th day with approximately 9 more days to go and current up leg should also retrace 76.4% of previous down leg taking it near 18000 to 18300 levels which is also the upper end of the channel, 23.6% level of retracement level of entire rally since bottom of October 2008 (now act as resistance) and resistance line coming in from November 2009 lows (shown on 1st chart). All these precisely converge together at 18000 – 18300 levels and this should be touched on 26th October ( +/- 3 days).” Simply PERFECT!!!
On 26th October, Indian equity markets were open for only 1.15 hour on account of Muharat trading and 27th October was holiday. So ideally 28th October becomes likely date for 18000 levels and index opened with a huge gap of almost 400 points that day making a high of 17908. This is in perfect sync with the symmetry we have observed.
It is now imperative to observe how Sensex reacts from current levels. A sideways consolidation forming a rounding type pattern has been seen during previous tops near the downward sloping trendline and so we can expect a similar sideways consolidation near 17900 – 18300 levels before the down leg starts!