SENSEX Long term count

SENSEX on a Wave 3

After many months of near sideways movement there was a huge H&S breakout in the BSE Sensex today. I think this is the beginning of a third wave up. It targets many thousands of points higher. Stop loss at 18,200.


From a fundamental viewpoint as well Indian stocks should do very well in a high-inflation plus high growth scenario. Demand driven inflation allows companies to preserve margins. Although costs rise so do sales and the nominal values of profits increases. An added kicker to stock prices is the high growth in the economy which means that the number of units of the products sold also increases (assuming constant marketshare).