SENSEX completes 61.8% correction

Keeping an unbiased approach means keeping track of alternate counts. In case the 2008 correction was a wave (II), we are in the area of a 61.8% retracement of the recovery rally.

IF the alternate count works out (the developing H&S patterns would have to be aborted), THEN positive divergence on the RSI makes it a fairly good place to start a rally.

Wait for confirmation in price – a higher low is required. I wouldn’t jump in with both feet quite yet.


NOTE: The count below uses a USD denominated ETF (INP). The Rupee denominated SENSEX has not yet retraced 61.8% but the above argument can be applied once it does so.