Dear Members,
24 MAY 2017
PSU Banks do not leave the news and
they make for a good debate on social media. But as the government takes baby steps more are convinced of the long term health and turnaround of these banks. What they miss that this is not a question of survival but understanding what it will take to get there. The charts speak their own language and the recent sell off should be a warning to those on their toes. Here is my PSU bank index update from this morning
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.
