Wednesday, June 30, 2010

Our good friend, the trading range

The Nifty is back into a range - with a breakout at 5370 and a breakdown below 5250. We should expect a move out of this narrow band, sooner rather than later.

Meanwhile, the S&P500, the U.S. Index broke down trading below a significant support at 1040. This is the fourth time that the S&P has come down to test the 1040 support. Just as a breakout above 5400 will be a bullish signal, so also a breakdown below 1040 for the S&P will be a Sell signal.

Meanwhile, the story has started that 'This time it is different' for India, since we are going up while the world is going down. My own sense is that it is never different. We will follow the world markets, sooner or later. I am not saying we will go down. But, our markets will align with the other markets. If world markets begin to go up, maybe we will be rangebound till they catch up with us. or, maybe we will see a sharp sudden decline to catch up with them. I cannot say. But, we are not decoupled.

2 comments:

rocky said...

A point of Excellence sir, after reading your blog was following us markets( as im in gulf) till late and boom down 1% by close. Tomorrow or later will be what u said
"sharp sudden decline to catch up with them"

bkm said...

Sir,
As per World Market Indices: indexq.org , India is 4th (0.95% +ve), 2nd (0.31% -ve), 3rd (4.97% +ve) on the 1 day, 1 week, 1 month rankings respectively.

--------------FII------DII--------
Aug 2007 -12338 + 9149
Sep 2007 +16357 - 4763
Oct 2007 + 8016 - 1352

From Nov. 2007 to Mar. 2009 FII were Net sellers (except dec 2008), whereas DII were net buyers during the same period.

The similiar trend has started since May 2010 (FII -12071, DII +6361) Jun 2010 (FII +7713, DII -4777).
The globe going down , India still shining. During 2007 Sep to dec. all TV channels had the euphoria of "India Decoupled" story.

I salute to your view:
Meanwhile, the story has started that 'This time it is different' for India, since we are going up while the world is going down. My own sense is that it is never different. We will follow the world markets, sooner or later.

Moral of the story India is always lagging. Time will tell what happens next... No Bias as per your thoughts.

Your last para ending should signal the future part of the story..... Let the wise way prevail.

As always awaiting your views eagerly, your blog for June has maximum entries, Thanks for exposing your firm views.