Financial Daily from THE HINDU group of publications
Sunday, Jun 23, 2002
Financial Daily from THE HINDU group of publications Sunday, Jun 23, 2002 |
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Investment World
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Stock Markets Markets - Commentary Nasdaq: Weak trend prevails B. Krishnakumar
THERE appears to be no respite to the bear rampage at the American bourses. The benchmark indices were pushed to lower levels during the week. As a result, most of the indices are now positioned very close to their September lows. After a strong opening on Monday, the market sentiment remained subdued on almost all the remaining days of the week. Weak earnings forecast from Adavnced Micronic Devices and Apple Computer affected market sentiment on Wednesday. Concerns pertaining to a slow down in consumer spending also played a part in denting market sentiment during the week. As a result, all three popular American indices registered net decline for the fifth week in succession. The Dow Jones Industrial Average posted a decline of 2.3 per cent for the week while the S&P 500 declined by 1.8 per cent. In the process, the S&P 500 dropped below the 1000-point mark for the first time since the September 11 attacks. The tech-laced Nasdaq Composite Index dropped by 4.2 per cent for the week. In the current calendar year, the index has posted a net drop of about 25 per cent from the levels in early January. Technically, the outlook for the Nasdaq Composite Index continues to remain weak. The index appears set to break below the September low of 1387. As mentioned last week, a drop below 1387 could have major negative implications for the index. A close below 1387 could push the index to the1280-1300 range. And a breach of this support range could push the index to the 850-900 zone. In the present market structure, only a close above 1570 would offset the bearish sentiment that is presently prevailing at the American bourses. However, the recent price action and overall market structure is indicative of further downside risk for the Nasdaq Composite Index. (Note : The analysis and opinion expressed in this column is based on the technical analysis of the past price behaviour. Analysis and price targets are based on Elliott Wave and Point & Figure techniques. There is a risk of loss in trading)
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