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Stock market review (weekly) after 30th March, 2012.


I was expecting that higher oil price may be an obstacle for stock indexes for some of the countries but oil prices were not much disturbing this week. Spain’s budget approval was a good sign, where as most were looking at finance ministers meeting about increasing the rescue fund for Euro zone.

INDEX
30th March, 2012
3/23/2011-3/30/2012 (%)
3/16/2011-3/23/2012 (%)




Dow
13212
1.01
-1.16
Ftse
5768.45
-1.48
-1.86
Cac
3423.81
-1.51
-3.3
Dax
6946.83
-0.69
-2.27
Australia S&P
4335.2
1.52
-0.14
Shanghai Com.
2262.79
-3.77
-2.21
Hang Seng
20555.58
-0.55
-3.04
Sensex
17404
0.24
-0.59
Russia :Titans
6265.25
-2.87
-4.98
Bovespa
64510.97
-1.98
-2.76
Argentina: Merval
2683.99
-1.03
-1.93
South Africa
33554.21
-0.05
-1.89

In early days of the week most markets were reacting on Bernanke’s statement and better German business confidence reports. Indian stock indexes saw positive numbers after 5 weeks but thing are still bad for Shanghai Composite.




Stock market forecast for coming week.

Stock market is going to react on outcomes from Euro zone finance minister’s meeting. Commodity prices are still in a level which can be a matter of worry but as price of Oil is not increasing much so many Central banks will be thinking about rate cut. I still think that liquidity is a problem for stock market.

Let's talk about different stock indexes.

I don’t know whether it is sound to say but it looks to me that DOW may try level above 13400 in coming week. It has a support at 13050 level and in early days if it drops then I will be looking at that level. If DOW able to stay above 13000–13050 then it has more chance to test 13400. But if it breaks 13050 then we may see it to test level below 12800 and as I said in last week that worst case scenario for DOW is 11600. Sometimes it looks to me that it is trying to create a wedge which may break out in future.

 

I was expecting DAX to test 7100 level in the early days of the week and as I said in my past week forecast it dropped in later days of the week. DAX is in oversold zone, but I think it requires more good news to cross 7200 level. I have an expectation that it may try 7050 level in early days of the week. Right now it is getting very hard to predict more about up moves, I think traders have to take decision on daily basis. But I will not surprise if it tests 6850 level in later days of the week, obviously this will be the case if any bad news comes. Here I must say that it has created a very short-term pattern which says about level below 6800. Now in case of big sell-off, if it breaks 6600 level then it has support at 6400.

 

BOVESPA got the resistance of 67000 and in the downside it got support below 65000. I think if market remains good then it will test 66000 level in the early days of the week, but testing 69000 level requires too much good things but market lacks in this matter. Last few week’s correction make it more attractive so an up move is quite expected, that not means that it will not correct in coming days. It has a good support at 64000 range and if it breaks that then it can test 63000 and then it has support below 60000.


I was suspecting that in spite of being in over-sold zone Shanghai Composite may test lower levels. As some indicators are signaling it is in oversold zone so a reversal is the need of the hour and as I said in past weeks that unless in goes below 2130, I am positive about the bullish pattern which it is creating. Right now it looks to me that it may test level around 2300-2350 range in coming days but that does not guarantees same moves in later days.

Straits TIMES got resistance at 3000-3020 level but last day’s figure is better, so it is again creating hope that it may break 3020 level in coming days. In the downside it can still test 2900 level and if it breaks that then it can trigger a bearish pattern which may take TIMES at below 2800 level. But unless world market faces a big sell of Strait TIMES may not see level below 2800 in coming days.


Reports due in coming days (from US)

Monday, 2nd April, 2012 – ISM Mfg. Index, Construction Spending.

Tuesday, 3rd April, 2012 – Factory Orders, FOMC Minutes, Auto Sales.

Wednesday, 4th April, 2012 – ADP Job Reports, ISM Non Mfg. Index.

Thursday, 5th April, 2012 – Unemployment Claims


I saw a report regarding the Moody’s rate cut against US financial institutes which probably is coming in May. If that is true then it is strengthening the lines that “sell in May and go away”. If those downgrades come then later we may see more downgrade for financial companies in other parts of the world. Market is guessing about cash infusion by ECB and also by FED, probably those are the next big things for world financial market. Many investors are expecting that in April events of the last two years will be repeated, I think stock market is a hard place though things can be same considering the political events those are due in this year.

 

 

NOTE:  Please see the disclaimer of this blog.

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