Sensex Time cycle is ripe for an up move!

Bottom Line: Sensex Time cycle is ripe for an up move. INR should start appreciating along with up leg in Equity markets.

Sensex Daily chart:

Sensex Time Cycles:

We first showed 69 days Sensex Time cycle on 25^th July 2011. We have been very accurate in capturing major turning points at the time when the emotions have been on extreme sides. In midst of extreme pessimism in January 2012 this cycle helped us to confirm our strong bullish view which was vindicated later.

For now we can see that Indian markets have been correcting in wave B sideways action for many weeks. Time cycles clearly suggest that Sensex was correcting simply time wise as Time cycle low is due on 2^nd May 2012 i.e. “TODAY”. We would still give a leeway of + 7 days to form a significant low in Sensex. In short, either a low of wave B is already in place or will be formed over next few days. A move above 17530 will provide strong positive confirmation. Cycle lows are usually associated with gapping up actions and we are closely watching for such structural moves.

Please understand Time cycles might change or vanish without prior indications. We are assuming that the current 69 days cycle is still active. Price confirmation is necessary for this bullish outlook. Unless that happens we can continue to correct sideways or drift lower.

In short, any move above 17530 will indicate next leg up has started towards 19900 levels which can be reached by mid of June. Failure of prices to rally over next 7 days will raise the odds that current cycle has changed and we could retest the lower trendline near 16900.