Tech musing

In my previous post on 18th November,  I wrote, “Shanghai Composite is trading at the lower end of the 25-year-old channel and in past, it had bounced back from these levels for three times generating multi-bagger returns. It seems to me that China is on the cusp of a major change if these levels hold Shanghai composite can multiply 2X or 3X from current levels in the next 5 years.  The risk-reward ratio seems extremely attractive from current levels.”

Since then Shcomp has moved up by 15% to 3090 levels despite all the negative news on US - China trade war.  The up move should continue and we should see a substantial bull market in Chinese equity. 

In another post on 4^th October 2018, I wrote, “If we look at the long-term yearly chart of Sensex the trend line support exists at 33000 levels. Which means that Index should not fall below 33,000 otherwise long-term trends will be broken and we will be in a multiyear bear market. We can see the support marked on the chart with an arrow. A multi-year bear market should not happen unless we have a major geopolitical event and break down in global trade system. Hence this scenario looks highly unlikely to me and I believe that most likely index will bottom out at 33,000.”

Since then Index made a low of 33,291 on 26^th October and bounced back to match the previous high. As expected the more bearish scenario did not play out. If we look at the given chart of the index, we can see that resistance exists at 12500 levels. The index may break the resistance in case of extremely favourable election results. The long term target for nifty stays at 15000 to 18000