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Stock market review (weekly) after 4th January, 2013.

May be it is a short-term rally but it is good to see that most stock indexes jumped on temporary solution of US fiscal cliff. Safe haven markets have faced a sell-off this week; I am not only talking about bonds & gold but also about defensive stocks.

INDEX
4th January, 2013
12/28/2012-01/04/2013 (%)
12/21/2012-12/28/2012 (%)




Dow
13435.21
3.84
-1.92
Ftse
6089.84
2.78
-0.25
Cac
3730.02
3.03
-1.12
Dax
7776.37
2.15
-0.31
Australia S&P
4723.8
1.12
1.03
Shanghai Com.
2276.99
1.96
3.71
Hang Seng
23331.09
2.93
0.71
Sensex
19784.08
1.74
1.05
Russia :Titans
6601.96
4.87
-0.3
Bovespa
62523.06
2.58
-0.09
Argentina: Merval
2996.28
4.98
2.44
South Africa
40274.79
2.26
0.67

In the last day US employment report helped S&P 500 to move on 5 year high. Most stock indexes have seen much appreciation this week and this is especially true for problematic nations of Euro zone. Australian ASX is facing 5th straight positive week.



Stock Market forecast for the coming week.

Many investors were expecting more from stock indexes but I think neither temporary nor the permanent solution of US fiscal cliff will act as a major trigger for market. Those things which have created problems during last few years, if good news comes from those areas then investor will be force to invest in riskier market; otherwise we may only see the couple of day’s movements in the upside, like what we saw in case of QE-3 and latest US fiscal cliff.

Let talk about different stock indexes,

Dow Jones I.A. reacted on its very short-term bearish pattern and now it may again continues it higher highs and higher lows trend, therefore Dow is expected to test levels higher than 13400 in coming days.
Here I must say that though it is not very clear but it looks to me that Dow is making a bullish pattern and if that is true then Dow may test around 13800 range, so in any way I have a feeling that Dow is going to make higher highs. But in early days of the coming week I will not be surprise if Dow test 13200 levels again.
In my earlier reviews I talked about a medium-term bearish pattern, that is still open for Dow and for that important levels is around 12400. On the other hand I will think about a short to medium term bearish pattern if Dow tests around 12850 ranges but still it needs time to get any clear picture. In the downside 13000 is important support level for Dow and for coming week emphasis should be given on 13200 range.

German DAX is getting resistance at 7800 range but its moves in last few days were good and if in coming days Dax maintains 7700 range then there is a good chance that Dax may break 7800 levels. Now in coming days if it breaks its initial support of 7700 levels then it may test good support level of 7600. So long it maintains 7600 range we may expect it to test higher levels again. But if it fails to maintain 7600 range in early days of the coming week then 7400 is important support level for Dax. I will think about a bearish pattern when Dax will be testing levels around 7000 ranges.

Last few days were very good for FTSE 100, especially its close in the last day but I will not be surprise if it re-tests level below 6000 again in early to middle days of the coming week. If it revisits that low levels then in later days it has a chance to test higher levels again.
In the downside if Ftse breaks around 5970 ranges then around 5900 are important support zone for it. Though I am talking about the support levels but I still think that even Ftse drops it has good chance to bounce again in the upside.

In my last review I was telling that it is better to wait for full confirmation of breaking 2000 level though this week South Korean KOSPI touched 2040 range but I would like to wait for certain more time. It looks to me that if Kospi maintains around 1980–2000 ranges in early days of the coming week and days thereafter will be crucial for Kospi for any directional moves. As I said in my earlier review that that if it breaks around 2000 range then Kospi has good chance to set a new uptrend, I am still holding that opinion.
In the downside 1980 is very important support level for Kospi if it breaks than then Kospi may drop more. I will talk about the bearish pattern when Kospi will be going towards levels around 1860 ranges.

Finally S&P/ASX 200 has acted on its bullish pattern. It takes little time to break 4650 levels which is quite good, if this bullish momentum continues then S&P/ASX has good chance to test higher levels. S&P/ASX is facing upside movement from around November and I have a feeling that it may take some time to break 4750 range. Therefore I will not be surprise if it again re-tests around 4650 levels in coming week and thereafter tries higher levels.
On the other hand I am still keeping the option of bearish pattern at around 4350. For coming week I will be looking around 4650 range very closely because if S&P/ASX breaks that then it has good chance to test below 4550 range.


Reports due in coming days (from US) 

Wednesday, 9 January, 2013 – Oil supply report

Thursday, 10 January, 2013 – Unemployment claims

Friday, 11 January, 2013 – US trade deficit


Others

Tuesday, 8 January, 2013 – German trade balance, German factory orders, Euro zone Consumer confidence and Unemployment rate.
Wednesday, 9 January, 2013 – German industrial production

Thursday, 10 January, 2013 – Chinese inflation numbers


NOTE Please see the disclaimer of this blog.


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