Resistance 2830STI moved up from the bottom of 1456 to 2810 where it broke the major resistances. SoSTI level of 1910 become the strong support for STI and 65% correction of entire upwardrally. It has achieved the target stated in our May’09 article which states the target of 2830. It seems that STI made a peak at 2810 as 5 waves Dow Theory is completed.Sell is recommended at current level with support at around 1910 level.Hang Sang Index (HSI)Current Level 22250Bottom 11300Support 15600Resistance 22800HSI moved up from the bottom of 11350 to 22250 where it has achieved our May’09article which states 20800 levels. So index level of 15600, become the strong support for HSI and 1/2 correction of entire upward rally.Sell is recommended at current level with support at around 15600 levels.BSE Sensex (BSE)Current Level 17400Bottom 8150Support 12200Resistance 17500BSE moved up from the bottom of 8150 to 17400 where it broke the major resistances. Italso touched our target of 15450 twice since 5
June and even superseded upto 17400.The target was stated in our article of May’09. There is also gap formed at 12200 and11400 levels. So, index level from 11100 to 12200, become the strong support for BSEand 50 to 65 % correction of the entire rally. There is also monthly gap up opening from11400 as on 4
May’09 and a big 17.50% gap up opening on 18
May’09. The gap is at12200, which shall fill at the time of correction.Sell is recommended at current level with support at around 11400 levels.
, emerging markets (EMs) reached the PE ratio of 8 during the bottom of the bear fall which is an indicator of over pessimism in the equity marketswhich ended in mid March, 2009. The pessimism gripped the markets all over the worldwith high negative bias which was all of a sudden. Commodity and equity markets fellsharply throughout 2008. Five year BULL market got heavy correction within the span of 26 months. EMs fell as much as 65% from the top of October’ 07 to January’ 08depending upon country to country. They bottomed out between October and November 2008. Ultimately DJIA, European markets and EMs finished their respective downfall bymid March’09. Stock markets of Brazil, Taiwan and China bottomed out earlier thanother world equity markets. The PE ratio disparity between DJIA and EMs has narroweddown rather the later has premium of 10% over DJIA. The projection of EPS for DJIA bythe end of 2009 is approximately US$ 660 (revised from 540) which discounted at PEratio of 11 would result in 7250 levels. Historical data shows that during the bear marketsin USA which prevailed during the twentieth century (Crash of 1929 and Crash of 1970swhich longed for more than 15 years), PE ratio swung between 8 and 14. The median of