DOW AND SENSEX
i will like to put 2 charts one is for sensex and other is dow. both are for last 6 months duration.if we observed them, we find that both dow and sensex made bottoms in march first week and started moving up. economical health is reflected in charts. from march bottoms we have nearly doubled from march bottom of 8k and dow has moved from 6.5k to 8.8k only 35% rise.
we moved near 200dma around 11300 ,consolidated for few days and crossed it and we have moved up by apprx 35% from 200ema.and dow is struggling around 200ema since no of days and still it has not been able to cross it decisively.
normally in technical terms 200ema is very good tool to judge whether we r in a long term bullish or bearish state.
so i feel these charts are reflecting that US econmoy is yet in a bad shape in comparision of our econmoy.so for US it may be taking more time to improve health and for our markets we can correct and say we reach near 200dma and start moving up. we r having PE of 20+ so we have run ahead of fundamentals with optimstic sentiment due to favourable political set up.and by the time we correct fundamentals may catch up in coming 2 qtrs.
now coming to fibo no at 61.8%, that is not the only reason for concluding to book profits but there r no of other indicators or facts. we have moved by nearly 100% from bottom. we have moved up without any meaningful correction , and more we move up without such correction more we are in danger of bigger correction.-ve divergence is seen in rsi and macd. we r highly over boght in daily and weekly charts.
another thing what i feel is that if US markets cross 200ema decisively then FII may change their view towards emerging mkts and they may find value in their mkts in comaprision of emerging mkts and more profit booking can be seen in emerging mkts.
in nut shell we are at a very good higher lvls and it is time to genearte maxm cash or to park yr funds in defensive bets or diverting them to gold as a hedge.
