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Stock market review (weekly) after 13th April, 2012.

Most of the stock indexes are showing nervousness, Euro zone debt problem is creating more fear and market is guessing about more liquidity.

13th April, 2012
4/5/2012-4/13/2012 (%)
3/30/2012-4/5/2012 (%)

Australia S&P
Shanghai Com.
Hang Seng
Russia :Titans
Argentina: Merval
South Africa

Chinese GDP and inflation figures were disappointing. Most of the European stock indexes are correcting during last 4 weeks.

Stock market forecast for coming week.

Investors are expecting good results from some of the big guns. Market is still looking for liquidity and as most of the countries are holding their rates so market is not getting any ground to go up. Oil price is still in uncertain zone and unless it secures its path, it is hard to say that oil is not going to effect the market. On the other hand investors are panicking by Euro zone debt problem.

So DOW reacted on its short-term bearish pattern which I mentioned during last few weeks. As I was expecting DOW reversed its position in later days, though its last day move was not good. From here it can drop more; therefore if it breaks 12600 then it can test lower levels in coming days. Worse case scenario for DOW is 11600. Here I must say that if it has to drop it may drop in early to middle of the coming week. In the upside if it crosses 13100 then it resistance is at around 13300 level, but this will be applicable if it chooses to go up in early days of the week. But if it goes up in later days of the week then around 13000 will be a good resistance.

Last week I was expecting DAX to test lower levels and I was talking about a narrow chance of testing 6950. As I was expecting it did less in the upside. DAX now is in over-sold zone but I still think that it may drop little more and I am expecting that in early days of the week. Therefore the pattern which I was talking about may be meaning less. Its next support level is around 6400. But if DAX select to go side based for few days then it may go up in later days therefore its initial resistance will be around 6800 level. Then it will take time to cross 7200.  Now in case of any big sell off we may see DAX below 6200.

I was expecting Shanghai Composite to cross 2350 level, but still it can go more in the upside. But here I am not sure that whether it will follow that in early days of the week. The important level in the upside is at 2375, if it gets resistance there then it may face little more correction. But even it gets down I think it has a support around 2300 level. As I said in past weeks that unless it goes below 2130, I am positive about the bullish pattern which it is creating. So, I am bullish about its medium term up move.


BOVESPA is not showing any specific trend but it is in over-sold zone, so a reversal is due. But considering the global trend it looks hard for this moment. If it breaks 62000 level convincingly then its next good support level is at below 60000. If it may reverse its position and therefore may test 65000 level and I will think about positive up moves, if it breaks around 66000 range.



Reports due in coming days (from US)

Monday, 16th April, 2012 – Retail Sales, NY state mfg. Index, housing market Index.

Tuesday, 17th April, 2012 – housing starts, Industrial production.

Wednesday, 18th April, 2012 – EIA oil Supply report

Thursday, 19th April, 2012 – unemployment claims, existing home Sales, phil fed mfg. Index, leading economic Indicator.

In the beginning of this year there was a growing expectation that many nations are going to cut the interest rate but recent rise in crude and food prices are becoming a big obstacle. Many countries are delaying the rate cuts and mostly markets are now talking more about reserve ration cut than rate cut. If we consider that rally from December last year was driven by liquidity then that means market will not go for another run unless it gets another liquidity push. Providing cheap money to Euro zone banks was not much successful in solving debt problem, so they may not repeat that step in future. Therefore market may go to face an uncertain time unless something comes up from US Fed or ECB.

NOTE:  Please see the disclaimer of this blog.


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