NEW DELHI: The Indian stock market has been termed as a potential "baby bull" as the Sensex may continue to advance over next 15 years and is Cashing in on your money
likely to breach its all- time high level of 21,000 during the period, a report says.
At a time when developed markets across the world are in a bearish phase, a technical research report by US-based Elliot Wave International has termed India, Taiwan and New Zealand as potential "baby bulls", while stock markets in Japan, Singapore, Hong Kong, China and Australia are going to be under the "bear" grip, the report stated.
The report has analysed that recent sharp reversal rally in Indian market, post the October 2008 lows, points at regaining earlier high levels.
It added that if the rally continues in the same proportion as between 2003 and 2008, "the Sensex may continue advancing for 15 years before reaching the end of wave".
"The potential baby bulls completed only three waves down from their respective highs, which makes them strong candidates to rally back to at least near their all-time highs -- if not beyond," the report stated.
Sensex had touched all-time high of 21,206.77 points on January 10, 2008, since then it plunged even below 8,000.
The report stated that Sensex would now embark on third wave which could see the index witnessing a multi-month rally, although share prices may come down for short periods.
"The decline since the 2008 high can be counted as three waves. A three-wave decline opens possibility of a rally back to near the 2008 highs. But there is reason to set our sights even higher," the research firm said in its Asia-Pacific Financial Forecast report.
The report said each high and low in the stock market is calculated on the basis of waves. The highs achieved by the Indian bourses between 2003 to January 2008 forms the first wave, while the bear market, till it saw the October lows, formed the second wave.
Since 2003, when the Sensex was quoting around 5,800 levels and had seen lows to the extent of 2,904.44 points, it had been on an upswing and reached the 21,000 level from where it started coming down to below 8,000 levels.
So far this year, Sensex had regained 9.20 per cent to 10,534.87 points.
Elaborating further the report said, "the Sensex declined in three waves to the October low, where it retraced approximately 50 per cent of its 2003-2008 rally on a percentage basis. The index has also just broken out of its downward trend channel.
"Even if the declines from their all-time highs later turn out to be only the first legs of a larger correction, the three wave corrections at present imply significant rally in the intermediate term. We should then be able to reassess the long term wave count from higher levels," the report said.
8 Apr 2009, 1500 hrs IST, PTI
4 comments:
think for next few yours...not next 15 years
bakwaas
don't publish bloody stupid posts
Dear – Every investor should go through the extreme pessimistic and extreme optimistic view. After going through the both views one should evaluate the conditions and facts.
Then only we can judge the actual happening!
In stock market investors should have the 360degree perspective.
With thanks
Be and make
I strongly believe in Elliot waves and feel that they hold true for long term although not so sure for short term, what is your opinion about the study ??
Thanks
Goel
UK
Dear Goel – Yes, for long term any thing can happen. I too believe that Emerging countries will out perform the global markets in the upcoming global rallies.
For short term, we may have some correction but key thing is nifty should hold the 3050 levels.
In India, Sensex companies earnings likely to rise where as the whole economy outlook is very bleak. Which clearly tells us the fact that our index not representing the Indian economy. So, our economy may not take the U – turn immediately but our sensex likely to march northwards in a tight range.
With thanks
Be and make
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