{"id":2540,"date":"2009-06-18T12:50:03","date_gmt":"2009-06-18T17:50:03","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=2540"},"modified":"2009-06-18T12:50:03","modified_gmt":"2009-06-18T17:50:03","slug":"a-road-map-to-sensex-100000","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/06\/18\/a-road-map-to-sensex-100000\/","title":{"rendered":"A Road Map To SENSEX 100,000"},"content":{"rendered":"

By Mark Galasiewski<\/span><\/p>\n

This article was originally published as a special Interim Report of EWI’s Asian-Pacific Financial Forecast on March 23, \t\t\t\t\t 2009. Since then the SENSEX has risen as much as 65%. For a limited time, Elliott Wave International is offering a full \t\t\t\t\t 10-page issue of the Asian Pacific Financial Forecast, Discover \t\t\t\t\t The Bull Markets You\u2019re Missing<\/a><\/strong><\/span>, free.<\/p>\n

**********************************************<\/p>\n

Prices in India\u2019s SENSEX have just broken above a downtrend line, imitating a pattern from 2004 that led to a strong \t\t\t\t\t rally. This interim report updates our wave count for India, since its wave pattern in particular may offer investors a \t\t\t\t\t rewarding long-term opportunity.<\/p>\n

In the March 2009 issue of The Asian-Pacific Financial Forecast, we showed how pattern, price, time and sentiment considerations \t\t\t\t\t were pointing to the end of multi-month, five-wave declines in most major Asian-Pacific indexes by late March. In most \t\t\t\t\t cases, those lows have likely been achieved.<\/p>\n

Although we have looked for a fifth wave down to below the October low in the SENSEX, it has failed to materialize. That \t\t\t\t\t failure plus the recent sharp reversal rally prompts our return to an earlier wave count. The daily SENSEX chart shows \t\t\t\t\t how the decline since the 2008 high can be counted as three waves. A three-wave decline opens the possibility of a rally \t\t\t\t\t back to near the 2008 highs. But there is reason to set our sights even higher.<\/p>\n

\"\"<\/p>\n

Perhaps the best argument for a bull market in Indian stocks is the potential fractal relationship we identified in the \t\t\t\t\t November 2008 issue, published just four days after the October low. The weekly chart below is an updated version of the \t\t\t\t\t one we showed at that time. Here is our analysis from the November
\nissue:<\/p>\n

\"\"<\/p>\n

\u201cThe Wave Principle teaches that the stock market is a self-similar fractal. That means that some pieces of its price record\u2014which Ralph Nelson Elliott called waves\u2014resemble other pieces elsewhere in that record. The weekly chart of India\u2019s SENSEX shows just such an example.Notice how the up-down sequence labeled Intermediate waves (1) and (2) (in the small red box) is a microcosm of the larger up-down sequence from the 2003 low to the present (i.e., waves \"\" and \"\", in the large black box). In both cases, the wave-two correction retraced approximately 50% of the wave-one advance. (We have calculated those retracements using the same logarithmic scale shown in the chart: logarithmic charting displays equal percentage moves proportionally).<\/p>\n

\u201cIf we have identified this \u201cnested fractal\u201d relationship correctly, it means that Indian stocks \t\t\t\t\t are about to begin Primary wave \"\" of the bull market that began in 2003. Waves \"\" and \"\" lasted more than four times the \t\t\t\t\t duration of waves (1) and (2). If that same proportion holds going forward, the SENSEX may continue advancing for 15 \t\t\t\t\t years before reaching the end of wave \"\".\u201d<\/p><\/blockquote>\n

Since then, the analogy to the 2004 period (\u201cThe 2004 Analog\u201d) has become even more interesting.<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Just as then, prices have broken down from an apparent triangle, and then reversed and broken out above the downtrend \t\t\t\t\t line. In 2004, prices never looked back after the breakout. As long as prices do not fall back below the low of today\u2019s \t\t\t\t\t breakout bar, we will assume that the 2003-2008 bull market will continue to provide a road map to the future of India\u2019s \t\t\t\t\t stock market.<\/p>\n

For more information emerging opportunities in Asian markets, download Elliott Wave International\u2019s free \t\t\t\t\t 10-page issue of the Asian Financial Forecast<\/a><\/strong><\/span>.<\/p>\n

About the Author<\/strong><\/em><\/p>\n

Mark Galasiewski is the editor of Elliott Wave International\u2019s Asian-Pacific Financial Forecast and member of EWI\u2019s Global Market Perspective team covering Asian stock indexes.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By Mark Galasiewski – This article was originally published as a special Interim Report of EWI’s Asian-Pacific Financial Forecast on March 23, 2009. Since then the SENSEX…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-2540","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/2540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=2540"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/2540\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=2540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=2540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=2540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}