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Stock market review (weekly) after 3rd August, 2012.

Market is facing adverse environment with no stimulus steroid from both sides of Atlantic, in spite of that most markets were in green this week. US payroll report helped European and US stock indexes in the last day. US treasuries and bonds of problematic nations in the Euro zone were also better in the last day.

INDEX
3rd August, 2012
7/27/2012-8/03/2012 (%)
7/20/2012-7/27/2012 (%)




Dow
13096
0.16
1.97
Ftse
5787.28
2.84
-0.43
Cac
3374.19
2.87
2.7
Dax
6865.66
2.63
0.89
Australia S&P
4221.5
0.28
0.25
Shanghai Com.
2132.8
0.19
-1.84
Hang Seng
19666.18
2.03
-1.86
Sensex
17197.93
2.13
-1.86
Russia :Titans
6023.47
1.28
-0.64
Bovespa
57255.22
1.24
4.35
Argentina: Merval
2396.78
-1.61
-0.95
South Africa
35244.22
1.65
1.3

Considering the sentiment in recent time, most of the European stock indexes performed quite well during last few weeks, even problematic nations such as Spain and Greece were good this week. Reaction of the markets in the last day was quite extra-ordinary. I think this type of thing may reflect the cash which is sleeping outside the market.



Stock market forecast for coming week.

Today it is a brief market forecast.

Gradually Dow Jones I.A. is triggering its bullish pattern and its last day was better but unless it crosses 13000-13100 level convincingly, it will be hard to prove that completely. On the other hand I told about a medium to long-term bullish pattern of DOW, for which important level is around13300 and if DOW crosses 13100 level and triggers its short-term bullish pattern then the chance of making that medium term bullish pattern will be stronger.

Dow is getting resistance around 13000-13100 level. Since DOW is making higher lows (or closing) so even if DOW drops from this level, that drop will be limited. Last week I was negating the chance of triggering the short-term bearish pattern but that may develop in a new form which is not clear yet. So the chance of future drops is still there and it will be prominent if DOW spends more time in 12500 to 13100 zone.


German DAX still does not able to cross 6800 level convincingly but it is good to see that it got the support of 6600. During last few weeks I was talking about the bearish pattern which can take DAX around 6100 but after this week’s moves, the chance of triggering that is less because on the basis of sound technical method it is out of that bearish pattern. Now in spite of that if something like that happens then it will be consider as an exception, here I must say that this opinion will be subject to up gradation if DAX moves around 6900 to 6400 for some more time. In that case the chance of going 6100 level will be still there but I will think differently.
Until DAX drops below 6600 level there is a good chance that it may test 6900 level. As I said in my earlier reviews that if DAX is able to stay above 6900 level then we may see good days for it but that may not necessary be a story for coming week.
In spite of better last day, still I am not too much confident about levels above 6900. DAX is making higher highs and higher lows, considering that if DAX breaks 6600 then I don’t think that it is going to drop below 6400 level, in fact we may consider around 6562 (50% retracement) as important support level for it.

Still FTSE 100 cannot break 5750 level convincingly so it is still not showing any particular direction. It is good to see that FTSE stays above 5600 level and as long as it maintains that the chances of up move is more than drop. Last day its move was better but it may take more time to completely prove its bullish pattern which is around 5900 level. Here I must say that on the average success basis it has already proved it.
In earlier weeks I said that if FTSE breaks level above 5700 then chance of triggering the bearish pattern is less. I am making some up gradation, which is, if FTSE maintains these moves in between 5450 to 5750 for more time then I will think about future drops with different angle and that may not be necessary with this bearish pattern which I talked during past few weeks. Yet 5600 is good support for it if FTSE breaks that then around 5500 will be the crucial level for it for further drops.

Shanghai Composite is still trying to recover from its lower levels, its last day was better but still there is not any big reversal in this week. So I am still waiting it to cross its initial resistance level of 2200. Here I must say that medium term bearish pattern says that Shanghai Composite can go below 2100.

South Korean KOSPI’s moves in early days were good but its end was bad, as it is again testing 1850 level. So things again remain the same, if KOSPI able to maintain this level then we can expect it to test 1900 level and thereby it will go one step forward to prove its bullish pattern. This week KOSPI’s moves took it out from lower highs and lower lows trend but unless it crosses around 1908, anything is not for sure.
Incase of any drop below 1850 level I will be looking around 1800 level. There is a good chance that KOSPI may turn around from that level to trigger the bullish pattern. Unless it drops below around 1758, I will be positive about that bullish pattern for now.

S&P/ASX 200 is still maintaining the upward channel and as I was expecting, still it does not able to cross 4300. I think that in coming week it may go to test the lower levels of around 4150, provided it crosses important level of 4200 in the downside. If S&P/ASX still maintains higher highs and higher lows then I don’t feel that will drop more that 4150 (or better to say near about 4120-4130 level). Here I must say that I will be worried about the downside or any bearish pattern when it breaks 4050 level.
S&P/ASX 200 has more or less fulfill its bullish patter which I was talking during last few weeks but still if it able to maintain its support at around 4200 then more up moves may come in coming week. 4300 is an important level for S&P/ASX, considering the past history I cannot rule out flat movements near that level.


Reports due in coming days (from US)

Tuesday, 7th August, 2012 – Bernanke Speaks

Wednesday, 8th August, 2012 – Productivity

Thursday, 9th August, 2012 – Unemployment Claims, U.S. Trade Deficit.

Friday, 10th August, 2012 – Treasury Budget


NOTEPlease see the disclaimer of this blog.

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