Home > Uncategorized > Market Notes: 15th September, 2011.

Market Notes: 15th September, 2011.

Dollar Index:

The US dollar is showing signs of consolidation above the top of the previous trading range of 72.8 to 76.5 trading range.  A failure to penetrate 76 over the next week or two will confirm a move to a new trading range between the low of 76.5 and a high of 81.5.  There is a fair probability that the US $ has turned bullish in the medium term and could test further higher levels before a meaningful correction. Upon a failure to penetrate the floor of 76, Dollar bears still trapped will have to cut their shorts leading to a further flare up in buck.  In any case it is not the time to be short Dollars in the market.

Frankly surprised by the size of the move in the INR against the US $.  There was nothing in the fundamentals that warranted a move in the INR from R 44 to 48 in such a short span of time unless there are too many shorts caught on the wrong side of the trade which is very likely.  Sentiment reading show people are still bearish on the $ in the medium term, an outlook not warranted by the moves in the $ Index that we saw above.  As the $ Index consolidates above 76, INR should also consolidate above 47 before moving to test the top of the current trading range between 47 and 49.  It appears highly unlikely that we will see a move below 47 on the INR anytime soon.  Shorts should cover if trapped.

 

BSE SENSEX:

The Sensex turned as anticipated before the overhead resistance of 17,500 confirming that it remains in a medium term downturn with a target around 15,500.  A further gap in the chart above 16,700 adds to the shorter overhead indicating trapped bulls.  With the markets firmly in the hands of bears, the charts show no immediate upturn worth noting.  Being at the tail end of a medium term correction, savvy investors will be covering shorts and/or going long in their favored scrips.  No change in the prognosis for the Indian equity markets.

NB: These notes are just personal musings on the world market trends as a sort of reminder to me on what I thought of them at a particular point in time. They are not predictions and none should rely on them for any investment decisions.

 

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Categories: Uncategorized
  1. sunny
    September 15, 2011 at 6:20 pm

    did u change ur position after today RBI intervention in forex market at 47.85 level further after petrol price hike which give some cushion to our fiscal deficit as well as world five largest central banks also announced a coordinated injection of dollars into banking systems

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