Sunday, September 27, 2009

Sensex: Intermediate peak in early October?


Prices behaved in line with the pattern we showed a few weeks back but the magnitude of rally is not quite as expected in a 3rd wave.
There is an increasing possibility of this final rally developing into an "Ending Diagonal". Please do not initiate any long positions now as risk reward ratio is not in favor of bulls and the global markets are showing signs of acute weakness.
Last year in October Sensex formed a major bottom but "Time Cycles" suggest, we will form an intermediate top in early October this year.

One can initiate a short position on Hindalco as prices broke below mid channel line @127 (recommended in previous blog) but beware of the possibility of a minor bounce back till 130-132 levels since short term RSI is in extreme oversold condition. Any bounce should be a good opportunity to initiate short!
Copper moved impulsively down today to 267 levels confirming weakness in the commodity space
Targets for short term on Hindalco is 115 and then101. We will review if pattern changes

Wednesday, September 23, 2009

Sensex - The Final Rally! Hindalco peaked as forecasted!


Sensex is now in final 5th wave rally that started last October
Prices are moving exactly in line with our forecast which we presented, for first time, in our blog on 8th September
Our bias is still up for a target of 17500 but with caution!

Hindalco prices stalled after peaking at 139.90 last week
Based on "Time Cycles" we predicted prices to peak sometime last week and it happened!
One can initiate a short position once the mid channel line at 127 is broken
We had an upward bias on Sensex and pattern completion for Hindalco. This is an excellent example that indicates how sometimes the "correlation is broken" and prices follow their independent Elliott paths

Thursday, September 17, 2009

Hindalco - Targets Achived! , Yes Bank - Good opportunity!!

Let us stick with this alternate count which we have presented since last week. Markets are behaving as expected in this pattern. We will review if lower trendline is broken
Sensex have given a decent rally in last 2 days
I am not here to catch a top in this rally and I would suggest you not to fall in that trap. Only if prices break below trendline we can evaluate alternative wave pattern

Hindalco achieved target of 131 as stated in our previous blog i.e. 14% return in just 1 week!!!
Please book your profits for the remaining positions at this level. More aggressive traders can use trailing stop loss method (SL @ 125)
We are keeping close watch on this stock to see when reversal might occur
Time cycles suggest we are nearby forming a peak this week
Yes Bank
Recommended by Vishal Dalvi
Yes Bank - Good opportunity!
Yes Bank is forming a very appealing pattern - an ending diagonal
It provides an amazing opportunity to go short on this stock but "only" after we get a price confirmation that the pattern is over
A short position can be initiated if prices fall below 174 with a target of 130 - 135
We can see a throwover today and prices shall reverse anytime soon but if prices continue to rise we may need to adopt alternative counts
The momentum is strong so please do not initiate a short position unless a confirmation in price is obtained!

Monday, September 14, 2009

Sensex Alternate count

Sensex Alternate count

Sensex still looks to be in complex mode. Wave patterns are not clear
If our alternate count has to be considered as preferred we should start a rally soon
Lets wait for a day or 2 more to adopt a preferred count. There are couple of equally probable scenarios right now

Hindalco had a decent rally after breaking out of triangular patter. If you had gone long as suggested by us in our previous blog last week, you would have earned 7% return in just 3 days!
Please book your partial profits at current levels
Use a stop loss of 117 for a target of 131 for remaining positions
Time cycles also suggest we are nearby or forming a peak this week

Wednesday, September 9, 2009

Bearish implications VOID!

Sensex alternate count
We will adopt this alternate count only after reviewing price action for next few days. As per this count we have target for Sensex of 17500. Lets wait and watch!
Hindalco alternate count

Price decisively broke upwards with large volumes out of triangular pattern
We do not have any preference view but above chart gives an alternate view
We will adopt this alternate count only after reviewing price action for next few days
Upside target can be around 131 as per this count
DXY finally broke downwards and moved even below 77.50 making the bullish pattern void! (atleast in short term)
More aggressive traders can go long on Hindalco with strict stoploss of 109

Tuesday, September 8, 2009

Sensex 2009 new high!


Sensex made a new high today but the elliott pattern is not very clear. It is more corrective than impulsive. Sensex still looks to be in a complex mode
Today's new high asks for cover of any short positions and wait for the pattern to become clearer
If prices start moving up impulsively from here on we will need to adopt an alternate count. Lets give this negative view more 2 days to prove its validity.
A break of upward sloping trendline from March low onwards will be a good opportunity to short

Hindalco looks still in a consolidation mode with no clear direction of breakout
Volumes are drying up everyday
Prices are very near to upper boundary and a break above the trendline with large volumes is what we should look for to cover any short positions
We are expecting a clear direction before end of this week
If price is able to move past 112 mark and stays there please cover your shorts

Friday, September 4, 2009

DJIA - An end of an "ERA"!

I thought of analyzing other markets till the time Indian markets test our patience!
Please observe since 1929 DJIA has moved in the bullish channel with utter precision and a throwover in the final Cycle degree wave V
The end of rally in early 2000 represents an end of an era i.e. not only end of a Cycle degree wave but of a super cycle degree that started somewhere around 1800s
Also we are in Wave C of an ABC correction that started after wave (V) of supercycle degree
When dealing with waves of such degree it is imperative to use log scale and wave measurements in percentage terms & not arithmetically
As per "Elliott wave principle" stated "impulse wave relationships usually occur in percentage terms"
The modest target for DJIA is 3500 and can even go further down in the territory of previous Wave IV. I will not be surprised even if it reaches in 1000 range. "We are dealing with supercycle corrections here"
This same explanation is valid for some of the other developed markets as well
Also momentum tools helps in wave counting, if used wisely. We can get classic divergences when in wave 5, if in wave 3 we should see a clear breakdown in momentum -- staying in extreme territories
The above interpretation is as per my understanding and may have other probable scenarios

Tuesday, September 1, 2009

Patience is virtue!!!

Patience is virtue in 4th wave corrections
Sensex is forming a complex pattern which should resolve lower
It is frustrating for a short term trader to be caught in such a complex pattern but it always helps to assume 4th wave as a complex correction even before it develops. It can save a lot of mental energy
We have a clear divergence in RSI
One can initiate a short position at this level with stop loss at top of wave b. The risk reward ratio looks appealing

It has been almost a month since Hindalco is moving in a very tight range.
It is imperative not to loose patience as Mr. Market has not proven us wrong till now, stop loss level at 116 is still intact
Please bear in mind Sensex has reached near its previous top but Hindalco is still ~6% below the high it made since March