Tide has Turned! Probable Path...

Sensex

Happened: As we said in our previous blog "Peak is here" since then market has capitulated
The best sector now to go short - is the "METALS". BSE Metal index gave best returns in the entire bull run from March 09 till Dec 09. This is the sector which should again outperform market but on the downside
Dollar index (DXY) has started the third leg of rally and this is the best period for going short on Commodities
We expect prices to reach our first target of 15500 - a 23.6% retracement of entire rally, also a Fibonacci value which Sensex has given lot of respect on previous occasions
Time cycles suggest some significant bounce back in last week of Feb - early March
Wave counts on 30 min chart do suggest a small upward correction soon but as I have always said the best strategy during such strong trends is to use Trailing stop loss method, as wave counts can be tricky and can move in extensions
Expect volatility to be very high and please be aware you might get whipsawed and stop loss might get triggered even if you are placed in right direction of trend. After that when market starts going in your direction again possibility is you will end up making a wrong impulsive trade. These are the times when emotions are high and markets enjoy testing it. In this probability game you will be rewarded only if you follow the rules and adhere to it. Bottom-line: "Avoid impulsive trades, Do not reinitiate trades without thorough analysis again after Stop Loss being triggered"