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Stock market reviews (weekly) after 2nd December, 2011.


On the one hand we saw co-operation between different Central banks to help different banks for easier access of funds, where on the other side S&P downgraded many financial firms and that must going to effect their borrowing cost. I am not sure whether it was a short-covering rally or there is something to cheer. But it is sure it will be wrong to think that Central banks effort is acting as a trigger for next rally.

INDEX
2-Dec,2011
11/25/2011-12/2/2011 (%)
11/18/2011-11/25/2011 (%)




DOW
12019
7.01
-4.78
FTSE
5552.29
7.5
-3.69
CAC
3164.95
10.77
-4.67
DAX
6080.68
10.7
-5.29
NIKKEI
8643.75
5.92
-2.56
HANG SENG
19040.39
7.63
-4.33
AUS
4288
7.62
-4.61
SHANGHAI
2360.66
-0.82
-1.5
SENSEX
16846.83
7.33
-4.12
BOVESPA
57885.85
5.44
-3.23
RUSSIA
6337.76
9.54
-4.47
INDONESIA
3779.84
3.92
-3.12
KOSPI
1916.04
7.86
-3.41
STRAITS
2773.36
4.89
-3.16
THAI
1029.37
6.43
-1.72
ARGENTINA
2629.63
8.39
-4.03

Moody’s also revised its outlook on the US from stable to negative as congressional committee failed to agree deficit cuts. India’s GDP growth figure, Chinese PMI and South Korea’s industrial output figure were disturbing but Euro-zone manufacturing figure and US employment report were better. Chinese reserve ratio cut was better indication, which market needs these days.


Stock market (Index) forecast for Coming week

Though most of the indexes are showing some type of bullish pattern formation and it will be clear in coming days, but technical indicators are still not supporting that bullish pattern. I am not sure whether there will be any change in macro situation through that Central bank effort. Let see what market gets after 5th December, 2011. As I told in past week that last two December showed that market becomes positive in this period of year, so history may repeat again !

DOW’s move from 11600 to 12200 was very nice, though I told about this level but I did not expect that it will be so quick. Now 12400–12500 is its next immediate target, if this type of sentiment stays then it can easily cross this level. In fact it has formed a bullish pattern though it is not clear, but it permits DOW to go much higher levels. On the other hand some of the technical indicators are saying that DOW is short-term over-bought condition and its last two day’s closings were not good. If it drops from here then it has support around 11800.
During last few weeks I repeatedly told that DAX is forming a bullish pattern, now if it breaks 6400 level then it can easily act on that pattern. Last two days closing was not good but unless it drops below 5200, I am confident about the up move.
Shanghai Composite decoupled form rest of the stock indexes this week. It was trying to test crucial 2300 level which I told last week, if it breaks that then it can go further lower levels. In the upside it has resistance at 2500 – 2550 levels.
Last week I was very disappointed with BOVESPA’s performance but since it unable to go below 55000, so the bullish pattern is still on for it. Now if the sentiment around the world stays on, then it can easily cross 59000 level. In the downside if it drops below 52000–53000 then it will negate the pattern.
Look like STRAITS TIME is going in the same direction which I predicted during last few week. It got support far above 2600 level and if things continue then it will try to test 2900 in coming days. In the downside if it breaks 2500-2530 level then it can drop more.


Reports due in coming days (from US)

Monday, 5th December, 2011 – Factory Orders, ISM Manufacturing Index.
Tuesday, 6th December, 2011 – Chain Store Sales
Wednesday, 7th December, 2011 – Consumer Credit

Thursday, 8th December, 2011 – Unemployment Claims

Friday, 9th December, 2011 – US Trade Deficit, Consumer Sentiment.

Coming European summit is very important. It is hard to say that whether ECB is going to use its fund for those problematic countries or it is going to help through IMF!  Whatever it is, one thing is sure that help is needed; at it needs quickly so that it becomes too late. Unless the funding problem in Euro-area is getting any solution, I am not going to believe that this is a beginning of a new ………….


NOTE :  Please see the disclaimer of this blog .



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