Analysis: Nifty Vs Baltic Dry Index

Baltic Dry Index corrected by 7% in the last 1 week and is corrected by 40% in the last 2 months after reaching peak levels of 4,230 on June 3rd. BDI is correcting from June. I plotted a chart comparing Baltic Dry index with Nifty for last 1 year.


Data used was from 21, August, 2008 to 21, August, 2009, and value on starting point was taken as 100.




My observations:

1. Till June end, there is an amazing co-relation between the two index.

2. After June end, Nifty has not followed BDI; hence if BDI follows

downward path in next month, there is more chance of Nifty coming down than going up.

3. BDI trend line is mildly up, whereas Nifty trendline is sharply up. So, Long Term: Trend is up, but Short Term: Trend is down as Nifty has gone up more than justifiable.

Regards,

Sourav Chowdhury