Aug 042009
 

BSESN 4Aug09
About six weeks back, wavetimes anticpated that India’s Sensex index will dip to the low 13,000 and then rally again. This has materialized. (If you would like to refer back, please navigate from the top menu under Equities/Indices/Asian Indices/India). How far can the fifth wave go? The earliest target comes between 16045 and 16115. A clean brak past the latter level could potentially take the index up by another 1000 points. But there is currently no reason for us to be buying at these high levels. If anything I would strongly recommend taking profits near here and stay in cash until we get a move back to around 13,000 again. Take a look at the attached chart and let me have your thoughts.

  21 Responses to “India’s Sensex: Elliott Wave update”

  1. Hi Ramki
    Nice article about Sensex
    May be if i m not wrong one mistake is there about plotting of .382 % fib extension level may be its start point 2 and not from 0. Any way you are right here..”But there is currently no reason for us to be buying at these high levels”
    regards
    Guddu

    • Hello Guddu, Thanks for the comment. If you look carefully, the 38.2% IS drawn over the point 2 to point 3. The fibonacci grid is highlighted by RED colored parallel lines so that the reader can see where the two points are..

  2. Dear Ramki Sir,

    Potential for 13K is good news for those who didn’t / couldn’t catch the previous move. I would love to know the time frames by which the targets can be generally expected.

    Would like to know your view on Alstom Power India, medium term.

    Regards
    R Sathyamurthy

    • Satyamurthy, Unfortunately, there is no reliable way to anticipate a timeframe for the dip to 13,000. As for Alstom Projects, if it can break above 570, we could reach 648. I am not too keen on thinly traded stocks such as these. There are more enjoyable ways of losing one’s money.

      • Dear Ramki,

        Thanks.

        IMHO even stock market speculation can be enjoyable. This is also one enjoyable avenue where one can spend money and stand a chance to (L)earn some.

        :)

        Regards
        R Sathyamurthy

  3. Dear Mr. Ramki,

    First of all, thank you very much for your technical update on SENSEX.

    Could you please update us on wave counts of SENSEX for a longer time frame
    and expected wave formations?

    Thanks in advance.

    • Hello Praveen,

      Every once in a while a wave analyst comes to a proverbial fork in the road, the elliott wave version of which is to choose between labelling a 5-wave move as a third wave or a “C” wave. As you know, we are close to completing a five wave move sometime soon. The speed and nature of the inevitable correction will give us clues about the bigger picture. I would urge you to look out for future updates that will show up on WaveTimes where I will try and decode all the clues (real and imagined!) that show up along the road, Good luck!

  4. ya its ok
    but i say about Fib extension (not fib retresment) which u plot target of 16,116

    • Hi Guddu,
      That Fibonacci extension is correctly placed. We compute 38.2% of the entire distance from “0” to “3” and add it to the bottom of “4” to figure out a potential target for “5”.

  5. Hi Ramki,

    Could you please try analyzing DLF & BSES?

    thanks,
    Tushar

    • Tushar,
      DLF has support at 311-316 area now. Think we could stage a recovry back to 380 levels from down there before the bears really come out. As for the BSE index, I am waiting for a dip to the low 13,000 at least before I will start buying any stock. If it goes up in the meantime, I will sit on the sidelines.

  6. thanks a lot Ramki. Do you think this is an opportunity to short or we need to wait for some confirmation to ascertain that Wave 5 is indeed getting corrected.

    Alternatively, do you think a bow-tie diametric formation is taking place on Sensex, one that started from 11695 to 14931 as “a” leg and it will bounce back from level of 14,300 going back to levels of 16,700 as part of last leg i.e g leg of this formation.

  7. Dear Ramki, Do you expect the market to touch 13000 in August, 2009 ?

  8. ramki, dont you think sensex is forming a fifth wave extension right now, i would grateful if you would enlighted your thoughts on this. thanks.

  9. Hi DInesh,
    We usually don’t get two extension in one impusle wave. So I’d look at the wave count carefully. Do you see a third wave extension? If yes, then downgrade your assessment of the 5th wave.

  10. sir, do you think sensex can be in an ending diagonal triangle currently? can an ending diagonal triangle be considered as an extension if it occurs in the fifth wave?

  11. DEAR SIR,
    IT IS GREAT TO READ UR VIEWS ON INDIAN MKTS. BUT DON’T YOU THINK THAT GLOBAL INVESTORS ARE HAPPY PUTTING MONEY IN INDIA THAN OTHER COUNTRIES. LATELY EVEN CHINESE MONEY HAS COME TO INDA. THE WHOLE WORLD IS SUFFERING FROM RECESSION BUT WE ARE STILL GROWING AND THIS GROWTH IS NOT BEING LOOKED BY PEOPLE +IVELY.

    I THINK INDIAN MARKETS ARE GOING TO BE VERY GOOD AS LOCALLY ALSO WE ARE VERY STRONG . AFTER EVERY RISE A CORRECTION IS HEALTHY BUT CORRECTION AFTER LOOKING AFTER THE GLOBAL MARKETS IN NOT HELATHY. HAVE U NOTICED THAT WE FOLLOW US/UK/CHINA/HK/SING MKTS BUT THESE MKTS NEVER TRADE AS PER OUR MKTS.

    CAN U ALSO THROW SOME LIGHT AS TO WHY U THINK 13000 IS GOOD LEVEL.

    • Sunil,
      I like your well reasoned points. The catchy headline of my comments is only for the sake of “effect”, like any newspaper article will catch the attention of the reader if it has a good title. Fact is, India is still a preferred destination for investors, and this is going to support our markets in the medium term. Right now there is a pretty good chance for a decent correction. The low 13,000 level is where the 4th wave finished, and that will tend to attract as a first support. This is not to say we won’t go lower than that. However, as an Investor (not a trader), one might want to start buying in stages from there because when the THIRD wave eventually starts, we may not have the courage or the time to enter the markets.

  12. [...] 4th August, I presented you with technical analysis of India’s Sensex index (BESEN). In that Elliott Wave update of the Sensex, you saw that there was room for it to reach 16045 or 16115. Nothing has changed in the last four [...]

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