FII flows consume a lot of analysis and much time is spent trying to figure out what news moves the FII and when and how the flows will move. Surprisingly with all the interest that FIIs generate, a Google search barely pulls up any mention of the "Dollex-30", besides the rare occurrence of it as a benchmark on some dollar denominated offshore fund.
The Dollex-30 quotes which the BSE started in 2001, combines the Sensex with INRUSD fluctuations to very simply display the P/L of an FII investing in India in Dollar terms. In my view this is much more useful in judging FII behavior than looking at levels on the Sensex, especially over longer time frames.
I started watching the Dollex-30 a few months before i started on the blog and have since used it successfully to determine many major turning points in the Sensex. There have been some data issues with the Dollex-30 since November 2010 and so i went ahead and found myself a substitute. As you can see, till the data was published the instruments move pretty much in sync, except for excess volatility during tops and bottoms.
So instead of the Dollex-30, I now use this instrument as a Dollar proxy for the Indian Market.
On the BSE Sensex the 61.8% retracement from the March 2009 lows to the November 2010 highs sits at approximately 12,895, which is quite a way off from the current 16020 level, and corresponds more closely to the 38.2% retracement, and the December lows (15136) are in no mans land between the 38.2% an 50% retracement.
At the same time the Dollar proxy made a low in March 2009 @24, high in November 2010 @83.66. The Dec 2011 low made @46 was at the 61.8% level and the last rally that lasted till late February 2012 saw resistance at the 38.2% level (approx 61). The market is now currently again at this level, and the fibs are working remarkably well with the Dollar proxy chart.
In summary, from a local view (Sensex) has retraced only approx 40% while the FII's have felt a bigger pinch with the (Dollex-30) retracing 61.8%. Should this 61.8% level break, FII's will begin to get weak at the knees..
The Dollex-30 quotes which the BSE started in 2001, combines the Sensex with INRUSD fluctuations to very simply display the P/L of an FII investing in India in Dollar terms. In my view this is much more useful in judging FII behavior than looking at levels on the Sensex, especially over longer time frames.
I started watching the Dollex-30 a few months before i started on the blog and have since used it successfully to determine many major turning points in the Sensex. There have been some data issues with the Dollex-30 since November 2010 and so i went ahead and found myself a substitute. As you can see, till the data was published the instruments move pretty much in sync, except for excess volatility during tops and bottoms.
On the BSE Sensex the 61.8% retracement from the March 2009 lows to the November 2010 highs sits at approximately 12,895, which is quite a way off from the current 16020 level, and corresponds more closely to the 38.2% retracement, and the December lows (15136) are in no mans land between the 38.2% an 50% retracement.
At the same time the Dollar proxy made a low in March 2009 @24, high in November 2010 @83.66. The Dec 2011 low made @46 was at the 61.8% level and the last rally that lasted till late February 2012 saw resistance at the 38.2% level (approx 61). The market is now currently again at this level, and the fibs are working remarkably well with the Dollar proxy chart.
In summary, from a local view (Sensex) has retraced only approx 40% while the FII's have felt a bigger pinch with the (Dollex-30) retracing 61.8%. Should this 61.8% level break, FII's will begin to get weak at the knees..
No comments:
Post a Comment