Elliott Wave Analysis of India's Sensex

Sometimes a wave count will remain valid for a long time. This is the case with India’s Sensex. I had posted my wave count back on 4th January 2010. At that time, I suggested that we will see the development of a 5th wave that could take us to 18550. The high so far has been 18295. The internal counts of the fifth wave shows its own 5-wave pattern. Hence, we should be cautious about buying here. Indeed, one should look for opportunities to lock in some profits and stay on the sidelines while the next correction takes us down by 38% of the whole rally from 7697 to whatever is going to be the top.


  • Ritesh Mehta

    Hi. I am intrigued by your count of Sensex and wish to discuss the ending diagonal pattern that you have marked out. I labelled the ending diagonal iii as 4 wave end and not i see up wave 5 for a final culmination at around 19k to 19.5k levels. Can you throw some more light on your count rationale?

    • Hello Ritesh, Sorry I can’t make out your count from what you have described. However, if you read my comments of 4th January, perhaps things will be clearer. Besides, the 19k level was always open. More important is what you are going to do with your count. Are you going to be buying here for the move, or or you going to lighten up. The goal of elliott wave analysis is to make money. Also bear in mind that two people can trade the same chart with different counts and both can still make money (or control risk). The only requirement is you are familiar with dealing with Elliott Waves, know the rules, guidelines and wave personalities. Good luck.

  • Manish

    i read ur 4th jan post also.there in comments section u have written “Ganesh, The Indian stock markets continue to trade higher, and I won’t be surprised to see 18,600 initially and maybe even 20,550 unless the Central Bank (RBI) does something to dampen enthusiasm.”

    now after seeing this sub waves forming in wave 5 does it indicate that now max is 18550-18600.

  • Hello Manish,
    A trader should exit longs as close to 18550 as possible and wait to see what happens there. If it starts coming off quickly, then shorts are warrented with stops above. If it breaks above that level, then one has to reinstate longs on a pull back with a watchful eye on the markets, because we are in any case in the final stages of a 5-wave rally. An experienced wave analyst would never say “Yes, this is going to be the top”. He would be prepared for a top, but always acknowledge that the market is supreme, and we use our tools to give us the so-called ‘edge’.

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