Hi,
Friday's meltdown was a big surprise. Trend is likely to continue on Monday 26 February also. Sensex may touch low of 13300 in intra-day trade. But that I hope will be the bottom. From here Market will rise like meteor as if there is no tomorrow. I see sensex touching 14000 on the day of budget and higher levels later in March. I see resistance level at about 15400 from where market may take a breather before resuming its journey to the top which may be 16000 or so in April/May.
How I have arrived at these figures. I have no hesitation to reveal my secret. The present cycle of the maeket began in April 2003 when sensex was at 2904. The first wave of this cycle took the index to 6249 in January 2004. Subsequent waves II, III, and IV followed. The fifth and final wave started on 14 June 2006 when sensex was at bottom on 8799. We are in the wave v of the Wave V of the current cycle.
For more serious Elliott Wave buffs, I wish to tell that Wave IV terminating on 14 JUne 2006 was of subnormal amplitude. It means that expected correction of 41.1% was actually 30.5% only. It confirms that strength from subsequent impulse wave i.e Wave V will be not strong enough which it otherwise could be. Above all, if corrective wave IV is of sub-normal amplitude, wave V develops extensions. In fact at present we are watching extension ii of the Wave V. My rough estimates of the sensex journey in next two months or so is as follows:
WAVE V: From 14 June 2006 to April 2007 ?
Minor Wave v of Wave V: From 12 Dec. 2006
Ext.1: From 12 Dec. 2006 (Sensex 12802 to 14724)
Ext.2: From 09 Feb. 2007 (Sensex 14724 to 13303 ?)
Ext.3: From 27 Feb. 2007 (Sensex 13303 to 15400 ?)
Ext.4: From ?? Mar. 2007 (Sensex 15400 to 14700 ?)
Ext.5: From ?? Mar. 2007 (Sensex 14700 to 16100 ?)
From April/May 2007 M.A.R.K.E.T C.R.A.S.H
Sensex plunges to 9670 in September/October 2007
SURESH MITTAL
