The trigger for the correction will be caused by external factors, namely the US markets. Yesterday, the Dow Jones was down by 289 points. The main weapon which the bears used to hit the Dow was investor worries about the Bank Stress Tests due to be out on the 4th of May.
Dow Jones : Worries about Bank Stress TestsAccording to Bloomberg, the Federal Reserve plans to release the stress tests of 19 of the biggest US banks on the 4th of May. The worries about the release of the upcoming Bank Stress Test results will weigh heavily on the markets in the short term.
Black Candle in Dow ; White Candle in VIXThe Dow produced one significant black candle last night which broke below the blue mid term line and did significant damage to its near term prospects. The VIX Index charts, which measures volatility in the S&P bourses also produced a significant white candle – signifying a spike in “fear” among traders which will empower the bears further. It looks like the upcoming pullback may be significant.
Looking for Support : KLCI – 936 ; DJ – 7,800 > 7,500
The bears’ big bite off the Dow Jones’ proverbial apple last night necessitates our immediate lookout for major support levels to cushion the Dow’s regression. We are calling for the Dow Jones to break below the red short term MAV line and to find strong support at the 7800 level then the 7500.
The bears will also arrive in the KLCI today to wreak some damage. As we said yesterday, we foresee a significant pullback coming for the KLCI. We call for the KLCI to regress to the 936 level in the next 1-2 weeks.
The bears’ big bite off the Dow Jones’ proverbial apple last night necessitates our immediate lookout for major support levels to cushion the Dow’s regression. We are calling for the Dow Jones to break below the red short term MAV line and to find strong support at the 7800 level then the 7500.
The bears will also arrive in the KLCI today to wreak some damage. As we said yesterday, we foresee a significant pullback coming for the KLCI. We call for the KLCI to regress to the 936 level in the next 1-2 weeks.Strategy : Call for significant pullback ; Maintain mid term positive outlook
We are calling for a significant pullback in the KLCI and the Dow Jones to the 936 and 7,500 level respectively. However, we maintain our mid term positive outlook on the KLCI and Dow Jones and opine that these pullbacks will be good opportunities for readers to buy high beta stocks at more reasonable prices.
We are calling for a significant pullback in the KLCI and the Dow Jones to the 936 and 7,500 level respectively. However, we maintain our mid term positive outlook on the KLCI and Dow Jones and opine that these pullbacks will be good opportunities for readers to buy high beta stocks at more reasonable prices.
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