Tuesday, March 24, 2009

Indian Stocks: Urgent Opportunity Announcement

Sensex
On February 27, the March issue of Elliott Wave International’s monthly Asian-Pacific Financial Forecast (APFF) opened with the following paragraph:

The dismal news headlines continue to roll in for the Asia-Pacific region: In January, Singapore’s exports dropped...the most in at least 22 years. Japan’s Q4 2008 GDP collapsed at an annualized rate of 12.7%, the fastest decline since 1974. The Federation of Indian Export Organizations reports that, by March, Indian exporters alone may cut 10 million jobs – a number about equal to the population of Delhi or New York City. In early February, China said that as many as 26 million of the country’s estimated 130 million migrant workers are now unemployed – a number about equal to the populations of Shanghai and Hong Kong combined.

For most investors, this news summary would probably motivate an immediate “sell” order on their stocks holdings in those countries. But you may already know that the Elliott Wave Principle is a contrarian investment method. That's why the March APFF continued its analysis with the following:

But all of that is old news – the natural, lagging fundamental expressions of Asia’s deepest financial crisis in decades – and it tells us nothing about the future of the stock market. To determine that, the best tools we know of are Elliott wave price patterns.

Exactly: Making investment decisions based on old news is like trying to drive a car by looking in the rear-view mirror. To get where you’re going, you need a forward-looking method.

On that, the just-published APFF Interim Report has the following to say:

Asian-Pacific Financial Forecast, Interim Report

March 23, 2009

In the March 2009 issue of The Asian-Pacific Financial Forecast, we showed how pattern, price, time and sentiment considerations were pointing to the end of... five-wave declines in most major Asian-Pacific indexes by late March. [Now] the daily SENSEX chart shows how the decline since the 2008 high can be counted as three waves.

Translation: Current Elliott wave picture in India’s SENSEX stock index “may offer investors a rewarding... opportunity.”

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