It is being mentioned in main stream media that there will be bull market in real estate sector. And there is a perception among the investors that real estate prices are going to move up. Will there be really a bull market in this sector?
Earlier, it was in 2008, there was a big bull market top. The top was followed by a big correction and as everybody knows, it has been a bull market since 2009. Now it is being projected, that the bull market will continue its trend in 2011-2012 period also.
If the present rally continues its uptrend for the next two years, then real estate market is growing after a brief correction. Is it possible for a back to back rally in this sector, that’s to in a span of 4 years. As for as speculative markets are concerned, markets after peaking for a long time takes five to 10 years to consolidate its position.
So back to back rally is not possible in this sector within this 4 years. My view is, the present rally in this sector is a temporary one and it is going to be followed by a big bear market which could last even for a decade. Investment in this sector can be avoided at current levels or you can postpone the decision of buying for another 1 year
The Australian Index AORD has been forming a expanding triangle since September of 2009 and also it is forming a expanding triangle since september 2010 in the final leg of the bigger expanding triangle. Expanding triangles normally retrace completely. So the present rally would terminate some where between 4900 and 5250 in levels in near future.
A correction from these levels is likely to terminate around 4600 initially. Break of 4600 could foretell a big correction for AORD. A rally past 5250 could only negate the present bearish scenario for this Index. Almost most of the Western Markets are trading in the same pattern. The bearish pattern is not only seen in AORD, but also in all World Markets.
And also, the rally after October 2009 has not moved above the all time high the AORD formed on 2007. The present rally would miss the previous high by a huge margin, if the present rally terminates around 5250. As of now selling the index when it moves towards 5250 will fetch some good returns from a traders point of view.
Since 2009 September, the United Kingdom stock Index FTSE has been trading in a expanding triangle pattern. Expanding Triangle is a reliable. But trading and projecting will be very tough for any Analyst or Trader. The price pattern suggests, the present rally from the low of 4800 from June 2010 seems to be the last leg of the Expanding Triangle.
The last upside rally in an Expanding Triangle would be followed by a last downside leg. If FTSE behaves as we project then it is likely to see a correction towards 4400 levels in coming weeks. For the short term, the level 6000 seems to be a crucial level for the coming trading session. If it could sustain above that level, a short term rally towards 6300 is likely. If not a correction towards 5450 is likely
In the Long term, since it failed to clear the 2007 high, this Index seems to be in a bear market.
Ever Since September 2009, Nasdaq Index is in expanding triangle pattern. The present rally from september 2010 seems to be the third leg in the upside, which is also seems to be the last leg of the expanding triangle.
Presently, Nasdaq is trading at 2660 levels. Earlier, in 2007 it tested a high of 2870. That level 2870 is likely to be the next upside target of Nasdaq. In the downside the level 2550 is going to be a strong support in the near future. For another 2 to 3 months it is likely to trade between 2550 and 2850.
In the medium term a correction could be possible towards 2100 from 2850.
Dow has been in a medium term rally since it tested 9600 on july this year. Recently, it made a year high at 11615. After testing its high it has been trading just below that level for the past two trading sessions. From here on the level 11300 seems to be crucial. As long as it trades above 11300, it is likely to test 11900 in coming weeks.
On contrary , if breaks 11300 and trades below that level, then it is likely to decline towards 10900 in coming weeks. Futures traders can hold their longs with a stop at 1130. And fresh Shorts can be initiated when Dow rallies towards this level.
The long term trend continues to be bearish. Dow is likely to make major top in the middle of 2011. Until then, one can hold their investments.
