Tech Musings

Let me start today’s chart check with US. The given chart is monthly chart of S&P500. We can see that S&P is trading in a channel. The upper end of the channel is near around 1450 -1470. Therefore I don’t see S&P trading above this level in near term.  Similarly if we look at the trend which started in March 2009 the current support is around 1250. Even this year’s opening low is around 1250. Therefore 1250 is an important support for the market.

S&P500

If we look at near term chart of S&P500 1350 seems to be a very strong support. Till the point market stays above 1350 S&P can move up to 1450 levels. Once it starts trading below 1350 target for S&P will be 1250. The risk rewards do not favor a long trade on S&P500. Only if S&P goes below 1250 we will see some serious downside in the market. My current view is that we will bounce back from 1250 and trade rest of the year between 1250 – 1450 levels. The probability of a break down below 1250 would not be more then 15% -20%



S&P500

 

Similarly the support for Dow Index around 12800

INDU weekly Chart

Long term chart of Nasdaq100 indicates that it is already trading at multiyear resistance.  I don’t see Nasdaq100 trading above 3100 levels for next one year.  All the three major indices in US indicates that we are trading somewhere near top and the market will trade between the range of +5% to -15% for the rest of year.

NDX Monthly chart



The next chart is of Nikkei 225. Surprisingly Nikkei is one index which is looking good. It had broken out of 5 years of downtrend. The target for Nikkei is around 11500 and 12500.



Nikkei

The next chart is of Yen. Yen has also broken out of 5 years of downtrend. I think Yen will now start depreciating something which I have indicated last year in 16^th June post. I think yen may move upto 100 levels this year which may aid breakout in Nikkei.

Yen

The next chart is of Shangahi composite. Surprisingly Shangahi is looking poised for a up move. This up move may last upto 2600 or even go upto 2900 levels. Readers may remember that in the same post I wrote on 16th June last year I have mentioned “Shangahi Composite: - Looks very weak on charts. If closes below 2500 on quarterly basis the index may correct severely up to 2350 and if falls below 2200 it may go to 1700 -1500”  The index indeed fell upto 2200 levels but have bounced back from there.

Shanghai compostie

The next chart is an intraday chart of Nifty. Nifty had completed 50% retracement of the up move which started on 7^th Jan from the lows of 4500 to a high of 5500. The next target for Nifty 4950 and 4800 if it falls below 5000 levels

Nifty 240 Mints chart

Second chart is weekly chart of Nifty. We can see that Nifty was trading in a channel since November 2010 till January 2012. The channel got broken in the up move and Nifty was consolidating above this level since March 2012. Today Nifty had taken support of the channel line.  Unless and until nifty breaks this channel support at 5080 level and closes below 5050 levels on weekly basis further downfall should be ruled out. My gut feeling is that we will break this level and move to 4800 in coming weeks.

Nifty Weekly chart

Next chart is monthly chart of Nifty. We can see that Nifty bounced back from the trend line support of 4500 in January. I feel that Nifty will again go and retest the trend line at 4800. Whether Nifty will break below 4800 or not is not clear at this moment.

Nifty Monthly charts

The next chart is of BSE Healthcare Index. Even in falling market We can see that Healthcare index is making new highs, Defensive investors can accumulate Healthcare stocks.

BSE HealthCare Index

The next chart is of INR.  CAD for year 2011 – 2012 was even higher then my expectation at 185 billion USD. With regulatory chaos, absence of policy initiatives, Government which have lost its will to improve the situation and a falling stock market it will be difficult for India to attract FDI and FII to the tune of 80 billion USD which is necessary to marinating balance of payment. Our forex reserves are limited to 295 Billion USD and our short term loans have for the first time exceeded forex reserve.  I think conditions are ripe where we can see rupee depreciating to 70 levels in next 3 -5  years. 

INR

The last chart is intraday chart of INR. Readers may remember that in my last post on 12^th February INR was trading at 48.50 levels and I have written that “The last chart I have pasted is of INR. INR fell from 54 levels to 48 levels and have reacted almost 61% of the rise. I think INR will have pull back from here and markets are forming a inverse head and shoulder pattern. I think the target for INR will be around 50.50 -51 levels from there they may again correct if FII inflows continue unabated.” INR have indeed depreciated rather severely in the absence of continuity in FII inflows and is currently trading at previous lows of 54.

INR Intraday Chart