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Stock market review (weekly) after 20th April, 2012.

Many Emerging countries have started to believe that inflation is not going to leave them. So in spite of higher inflation rate they are reducing the rates, to increase the growth rate. In same way it will be better for market to understand it clearly that Euro zone debt problem is not going to leave us easily. As I said in past that if these problems come (in such a fashion) from a bigger country like US or Japan, then we can define it other way. IMF gets $430 bn more, which may give some sort of satisfaction.


INDEX
20th April, 2012
4/13/2012-4/20/2012 (%)
4/5/2012-4/13/2012 (%)




Dow
13029.26
1.4
-1.62
Ftse
5772.15
2.13
-1.26
Cac
3188.58
-0.02
-3.94
Dax
6750.12
2.52
-2.82
Australia S&P
4366.5
0.99
0.08
Shanghai Com.
2406.86
2.02
2.28
Hang Seng
21010.64
1.49
0.52
Sensex
17373.84
1.63
-2.24
Russia :Titans
6275.03
0.72
-1.53
Bovespa
62494.08
0.64
-2.49
Argentina: Merval
2338.48
-6.54
-2.17
South Africa
34216.55
1.52
-0.08


I am not sure that we are going to see a rating downgrade of France in coming days but many must be glad on the news that Denmark’s biggest banks are firing Moody’s. I think in future many nations will follow that, especially Euro zone nations.




Stock market forecast for coming week.

Oil price is not giving more problems in last few weeks, so that is a good thing for some market. G-20 meeting is crucial at this point, now it is very important to see whether market is satisfied with this $430 bn!  Many experts are thinking that Euro-zone is just buying time for their problem. Now investors are waiting to hear something from US Fed, so stock indexes may face an uncertain periods up to that time.

Last week I told that if DOW goes up in early days of the week then it will get resistance at 13100. I was pretty sure that if DOW does not drop in early days of this week then it will not drop much. Now it looks to me that it may again re-test 13100 but that is a narrow possibility. Here I am not too much confident that DOW will cross 13200 in coming days, this is in spite of the fact that some indicators are supporting the higher moves. Looking at the long-term chart, I have a feeling that DOW has a chance to drop more in later days of the coming week. If it drops below 12900 then there is a possibility that it may test level below 12700, though this is subject to new bad news. Worse case scenario for DOW is 11600.

I was expecting little more correction for DAX in early days of this week but it did not. Still I think that DAX is due for little more correction and therefore the important level to watch is 6550, if it breaks that then its next support is at 6400. Now in case of any big sell off we may see DAX below 6200. Technical indicators are not reflecting that DAX is in very over-bought zone so in the upside it can test up to 7000 again. Right now expecting 7200 is too much for DAX.

If Shanghai Composite able to cross 2500 then it will trigger the medium term bullish pattern, which can take it around 2900 level. But right now shanghai composite is very much in over-bought condition so a short-term correction is due for it. But if it follows the same trend which it is doing during last few weeks then I will say that it will not drop much. But if it faces huge sell-off then things will be different, here I must say that if it goes below 2130 then it will not act on that medium-term bullish pattern which it is creating.

 

BOVESPA’s is still not showing any specific trend and it looks to me that around 63000 level is creating a good resistance for it, so if it cannot change this trend in early days of the coming week then there is more chance that it will drop from here. Now if it takes the northern way then its next resistance is at 64300 and if it breaks that then next resistance is at 65500.

 

 


Reports due in coming days (from US)


Tuesday, 23rd April, 2012 – Case Shiller Housing, New Home Sales, Consumer Confidence, FHFA House Price Index, Richmond Fed Mfg, Index.

Wednesday, 24th April, 2012 – Durable Goods Orders, Fed FOMC Statement, FOMC Forecast.

Thursday, 25th April, 2012 – Unemployment Claims, Chic. Nat. Bus Index, Pending Home Sales, Kansas Fed Mfg, Index.

Friday, 26th April, 2012 – 1st Quarter GDP Rev., Employment Cost index, Consumer Sentiment.


As I said during last few weeks, market is still facing liquidity problem so in this circumstances there are lot of chances that market may correct more (in spite of that IMF news from G-20 meeting). I am saying this considering the fact that still there are lot of investors who are waiting with lot of cash.


NOTE:  Please see the disclaimer of this blog.

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