Earlier today, I came across an article comparing the chart of Sensex with that of the South African Index.
Both shown below:
At first sight, both look very similar, and bulls can hope that the Indian market does what the South
African market has done.
However, one needs to also keep in mind the following 2 charts – those of the respective
currencies against the USD, and in my opinion, there lies the difference.
I conclude from the above, that as long as INR is behaving the way it is, and as long as Sensex is below the
all time high, the risk: reward ratio at this stage is in favour of the bears than the bulls.
Both shown below:
At first sight, both look very similar, and bulls can hope that the Indian market does what the South
African market has done.
However, one needs to also keep in mind the following 2 charts – those of the respective
currencies against the USD, and in my opinion, there lies the difference.
I conclude from the above, that as long as INR is behaving the way it is, and as long as Sensex is below the
all time high, the risk: reward ratio at this stage is in favour of the bears than the bulls.
2 comments:
Very good comparison and as you have already point that the difference lies in the currency. Can the RR show turn into hoRoR show?
good one
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