updates from VIVEK PATIL

9/08/10

updates from vivek patil.

*************************************************************************************************************************

Even if we do see further rallies, the question right now is whether the same would keep facing profit-booking, even if they do hit higher

levels. Previous two new highs of Jul'10 did get sold into, firstly at 18167, and then at 18238. In fact, the bigger picture since last Oct

shows all news highs of this rally attracted selling, each time Sensex shaving off 2100 to 2400 points.

Structurally, the "i" leg appears to be developing as a Contracting Triangle. The "c" leg was 61.8% of "a", and "d" was 61.8% of

"b", forming into contraction. The "e" leg will achieve 61.8% ratio to "c" leg at about 17325.

Though not resisted at 80% retracement level, topping formations can even show Double Tops or measured higher highs.

Topping action usually turns out to be a tricky affair, and the same will be expected as long as the Sensex keeps its head

below the maximum potential of 18357.

That potential was also explained as the upper end of the year-long channel shown on the Daily chart.

To keep any bullish option open for the next week, Sensex should not only move above last week's high of 18295, but

also above 18357 level.