The PSU Bank index is at the upper end of its range since 2010. Draw a trendline from the highs and we just about kissed it. My sensex is that wave Z down started as shown. This is the last and final wave down for any corrective phase. And while it does not have to be large and can end at the neckline my sense is that it will extend as shown and end with an ending pattern. The entire recapitalisation of a sector is not possible without major write downs and declines in book values and rise in the equity base. This is just logic that anyone should get. What are you thinking? In any case we look at the sectors investment potential only after wave Z down is complete. Right now the upside is hardly any in my understanding of the trendline resistance.
Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd