Can sensational Sensex be as simple as Indian Trafffic lights ???

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In past 8months how many times did media channel guys said Sensex will correct below 8000 & then below 12000. Now media says Sensex will touch 20000 but people are not ready to believe as they burnt there fingers.Investor physcology says common Investor buys mid way or towards the end. Therefore they missed 1st phase of rally & now second phase too. Anyways my belief is that Sensex will correct towards mid of Nov by atleast 1500 points till Dec'09. So stay invested till second week of October & then decide for urself. See those figures in Red Geen & Amber similar to Indian traffic lights. Now how to read it what I can teach u, provided u also participate & throw questions to me via comments.
P/E Ratio of Index, P/Book Value, Dividend Yield ?? Does that help us in Indicating direction of Sensex.

Comments

  1. harriSeptember 9, 2009 at 5:42 AM

    what is this all about. The colours are confusing me. Are there supposed to be three smooth coloured lines on the graph for PE, P/BV & Div Yield? The jagged line is for sensex but what is the outcome from analysis?

    ReplyDelete
  2. HirenSeptember 15, 2009 at 8:59 PM

    Hi Prashant:

    Can you tell me on which site we can get the stats about sensex PE. The chart you show is good barameter to track sensex movements.

    Hiren

    ReplyDelete
  3. perknlifeSeptember 19, 2009 at 1:49 AM

    Hi Hiren this data is complied by BSE & available for all.
    Simple maths is Lower P/E value of Index better. Basically P/E of 1 indicates Price of Index consitutents is equal to there latest Financial year Audited earnings. Let's say you go to Hotel he says in whole year after all expenses my profit is 1 crore & he wishes to sell his business for 1 crore(unlikely scenario in reality). For Index we will have to consider weights of each constituent(each script) & then calculate it....
    As P/E marches higher one needs to be cautious.
    I also key in factors like Economic cycle in consideration.we arrive logic from the above numbers.

    ReplyDelete

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