Sensex in US Dollar! Is it reflecting a true picture?

Understanding the medium to long term trend of Sensex in terms of US Dollar i.e. looking at S&P Dollex 30 index with Elliott wave and trendlines!

Do you know how much returns Sensex has provided in Dollar terms since 2008? The answer is “no returns” if investors would have invested at the high of 2008. As against to this Sensex and Nifty in Indian Rupee is trading way above its high made in 2008. So let us understand “S&P Dollex 30 index”. Below part of research is taken from “The Financial Waves Monthly Update” which is published in the first week of the month.

Sensex in US Dollar terms - S&P Dollex 30 index Monthly chart

Published in the monthly research -

“The S&P BSE Dollex 30 is the USD version of the BSE SENSEX, India's most tracked bellwether index. Dollex-30 is the Bombay Stock Exchange's Sensex Index quoted in U.S. dollars. The BSE introduced Dollex-30 on July 25, 2001. Except for the Dollex indices, all other BSE indices reflect growth in the market value of their constituent stocks in Indian rupees.

With increasing inflows of foreign direct investment (FDI) and as Indian equity markets integrate rapidly with global capital markets, the Dollex indices take into account currency fluctuations to show Indian growth in dollar terms. They are international benchmarks for the Indian market and reflect changes in both stock prices and exchange rates. As a result, they are useful to foreign investors looking to measure the "real returns" of their investments in the Indian market.

The Dollex indices are calculated at the end of each trading session by taking considering the day's rupee-dollar reference rate as announced by the Reserve Bank of India (RBI).

Now let us look at the trend of BSE Dollex 30 from Elliott wave perspective: In the year of 2008 this index formed important top and completed the up move which was ongoing since 2003. Post the same prices are trading in Triangle pattern which has not yet taken out the high of 2008. As against to that, Sensex and Nifty is trading way above its high made in 2008. This suggests that in terms of Indian rupee, Sensex has performed well whereas in terms of US Dollar, still this index is moving in no return zone since 2008. In the year of 2015 intermediate wave D completed its course and since then intermediate wave E is ongoing which itself is forming Triangle pattern. The rally witnessed in last on year is in form of minor wave (b) which is near the B-D trendline. As per rule of Triangle pattern, no part of wave E should violate ……….

RSI Observation: Here we can see that RSI is moving in a range of 70 and 30 levels from last 8 years. Post the recent rally, RSI has again arrived at resistance zone and hence momentum from …….

In short, S&P BSE Dollex 30 has arrived at the important juncture. This index has still not taken out high of 2008 as compared to Sensex and Nifty which suggests underperformance. Hence any move below 3600 will continue the sideways to negative action before the meaningful low is formed. However any move above 4400 will indicate that Triangle pattern has completed its course in the mid of 2016.Isn’t it interesting to see that in USD terms investors did not make any returns for more than 8 years despite all the euphoria we are seeing in Sensex in INR terms!!!”

The monthly research report is now published. This report shows overall trend of Nifty applying  Neo wave, Gann Projections, Hurst Time cycles and Price to Earnings ratio. Outlook on BSE Smallcap Index. IGL Long term pick. What S&P Dollex 30 index is suggesting? Path ahead for CRB Index. Outlook on EURUSD. Mutual Fund section. Get your copy and see the long term forecasts and world markets at a glance. For more details Contact US