US consumer confidence raised by .9% after a long long time and hence US stocks cheered it by raising the Dow by 230 points !!! Us stocks fall and rose sharply twice in July thereby creating enough confusion in the minds of investors about the future trend.
Indian stocks touched around 12000 Sensex levels and rebounded sharpy to 14000 due to the Manmohan government winning the vote of confidence. Commodities fell sharpy in July thereby majorly reversing their winning move through 2008.
I feel Dow has a life long major support around 10700 and it bounced back from 10800 levels to 11300 levels as of now. US markets has got 75% chance to bounce back from current levels for the rest of 2008. Any fresh, severe bad news can make the Dow to re-test 10500 levels which I would say with 25% chance.
As for as Sensex concerned, I feel anything above 15000 levels are overpriced - as inflation - 12%, IIP - 6%, interest rate - 12%. Hence, copying hongkong, Dow daily movements can only create further damage to the sensex over a period of time and I expect Sensex to retest 12500 levels over next two or three months. RNRL could surprise everyone with a strong bull rally.
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