BSE500 vs. DOW

We are not out of the woods yet. Sensex seems to have completed a flat a-b-c corrective and still has further minor downside. Our longer term view remains positive till Nifty 5,100-5,000 holds. (Sensex 16,600). This week we compare Sensex with Dow to understand how is Sensex positioned vs. global markets and sectors.

On 24 Jan 2011 we said, “From Jun 2010 the DOW underperformed Sensex by nearly 25% till early Oct 2010. Since then the DOW has outperformed Sensex by 10% and the Intermarket Cycles trend remains in favor of Dow. ”

From Nov 2010 till date, Dow has outperformed BSE500 by above 30%. Dow continues to outperform BSE500.

In this report we have carried perspectives on various global indices, performance cycles and comparative signals between XRT (Retail Sector) and XLF (Financial Sector) and XME (Metals and Mining). The sector pictures continues to suggest that Metals and Mining sector remains weak while Retail consumption continues to thrive. Gold remains weak while Oil gets ready to move to historical highs.


Mukul Pal, is a Chartered Market Technician, MBA Finance and a member of the reputed Market Technicians Association (MTA). He has more than a decade of Capital Market experience dealing with derivatives and global assets. He has worked for Bombay Stock  Exchange, multinational Banks and brokerage houses in leading research positions before starting on his own in 2005. He is the President of the MTA Central and Eastern European Chapter.

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