this is the 8th straight up month for the sensex.... maybe this pattern should be taken seriously... only once has the sensex done this before, when the bull run began in may 03
We are sitting on a double top that has a mininum downside till 11500-11600.
However there are some differences in the present scenario with John Magee's classic interpretation of a double-top pattern.
Also the (long) leveraging is far too low (& the mood far too cautious) for any 'bear raid' to generate windfalls at this stage.
So instead of a deep decline what we may have is a series of smaller, extended minor kind of corrections. Swagat's fib retracement levels for the Gartley also suggest the same. A lot will depend on the third qtr results.
Hedge funds are moving out of industrial commodities sensing a global slowdown in 07 So these stocks along with Banking will be good shorting candidates during a fall. Any other ideas??
In any case all we can do for now is tighten those stop losses and remain as alert as we can.
Regards,
Kalyan.
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