Following up with our last post, the Markets did seem to retest the 2008 levels, but as they have been always, just surprised everyone with a huge recovery!! An jaw dropping 1500 pts. recovery in a matter of a week`s time would have disappointed many sitting ducks! And there are still who feel , cash still remains the best position.
Justifiably becoz the markets have been trading in a tight range, showing no clear direction, or at least considering the recent Glocal factors, has not shown a southward trend, as expected.
Thus, we checked the bellwether`s chart, with a ray of hope for some significant pattern. But we could not find a convincing pattern, apart from a few trend lines here and there. So, for the time being, all that we could demystify from the charts is that whether the Markets have any significant direction. We do so with the ‘Average Directional Index’, which identifies how strong the market direction is.
The ADX is between 0 and 25 (highlighted in the Chart) which shows that the markets are in a trading range. It is likely just chopping around sideways.
We may broadly define this range as 17700 to 19200 or so. Looking at the current Market Scenario, we can hope that downward trend to retire at somewhere around 17800 and then expect some respite thereon.
These are just some of the factors the Markets may react to, in the coming week(s), these are,US Debt Ceiling Issue ,Greece(further) Downgrade, A new flurry of Scams with latest entrant being the Mining Scam & as well as new developments in the LIC Housing Scam , and also Q1`12 Results of few heavyweights!!!
However, as the Great Warren Buffet said , Even average returns can become very attractive in the longer term due to the power of compounding! And for those whom the Power of Compounding has disappeared, is because its working overtime somewhere. Where? Look at the table below….
Chronology of scams in India | Size* (Rs m) |
Bofors scam, 1989 | 400 |
Harshad M scam, 1992 | 6,000 |
Telgi scam, 1995 | 20,000 |
Hawala scandal, 1997 | 1,000 |
Ketan P scam, 2001 | 50,000 |
Satyam scam, 2008 | 90,000 |
CWG scam, 2010 | 80,000 |
2G spectrum scam, 2010 | 1,760,000 |
Overall corruption | 15,550,000 |
Money laundering | 18,860,000 |
Data source: Wikipedia, Equitymaster
No comments:
Post a Comment