During the last 20 yeas ASI has been increased from 606 in the beginning of Jan.1993 to 7797 on Feb. 28th 2011 ( highest during the day 7823) and again dropped to 5009 on Feb. 14th 2012 (lowest during the day 4962) recording a drop of 35.75% within around one year period. However, ASI again increased rapidly within two weeks (an increase of 8.96%) to reach 5458 at the end of Feb. 2012. This resulted in a reduction of the drop (35.75%) as at end Feb. to around 30.0%.
In March 2012 up to now index has shown as more or less stable fluctuating within a narrow zone of 5400-5500.
What would be the shape of ASI in the near future during the rest of the year and in 2013? Can we guess this using TA or general practical knowledge in stock trading?
I have picked some data from JBS and Yahoo Finance websites. Accordingly, I have summarized some ASI figures as follows;
year. Jan. Dec. Up/Down%
1993 606 987 61.3% -up
1994 987 987 00.0% -stable
1995 987 663 32.8% -down
1996 663 603 09.0% -down
1997 603 702 16.4% -up
1998 702 597 14.9% -down
1999 597 572 04.1% -down
2000 572 447 21.8% -down
2001 447 621 38.9% -up
2002 621 815 31.2% -up
2003 815 1062 30.3% -up
2004 1062 1506 41.8% -up
2005 1506 1922 27.6% -up
2006 1922 2722 41.6% -up
2007 2722 2540 06.6% -down
2008 2540 1503 40.8% -down
2009 1503 3385 125.2% -up
2010 3385 6635 96.0% -up
2011 6635 6074 08.4% -down
2012.03.19 6074 5414 10.8% -down
From the above figures one can note an important fact to explain the reason for huge increase of ASI in 2009 and 2010. The war between the govt. forces and terrorists were more crucial in 2008 and hence investors wanted to exit from the market resulting a severe drop of 40.8% in ASI. However, after the defeat of the terrorists, in 2009 and in the following year 2010 ASI required catching up again as the business environment became normal. This resulted in a higher growth of the index when compared with the index(1503) as at end 2008 (which is an unusual year)Therefore if we calculate the change of ASI during the 3 years from the beginning of 2007 to end 2009 we could arrive at a figure of (3385-2722x100/2722) +24.35% (up). Then this uptrend cannot be considered as abnormal or unusual since the increase of 24.35% is within a period of 3 years. Year 2010 of course an extraordinary year coz of the post war economic development and hence anyone can justify around 80%, 90% growth in the index. Therefore we can’t say that the increase of ASI figures during 2009 and 2010 are extremely high or unusual.
Further, present ASI value (5414) is almost similar to the figures (5182-5658) in August 2010.
Let me calculate present index with the ASI at the beginning of the year 2007;
ASI at the beginning of 2007. = 2722
ASI (19.03.2012) = 5414
Increase during 5 years and 2 months = 5414-2722= 2692
Increase as a % = 2692x100/2722 =98.89%
So for a period of 5 years ASI increase is only 98.8%.Is it abnormal or too high?
Under this background I do not know whether anyone can say present ASI of our market is too high or manipulated.
Above views are just my thoughts only. May be I am completely wrong. But I think we can discuss little more on my views if anyone is interested.