Explanation
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.
Hindalco
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
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