The bounce that I have been talking about did finally happen. From the last blog post, " 1250-1260 is not only a strong area of support but also a well-known area of strong support. Because of that, I would not be surprised to see buyers step in even before the market reaches these levels. Rather, I expect that to happen. " As can be seen from the chart below, the low since this post was 1265.
So, definitely a good day for the bulls, but not a game changer as far as the overall picture is concerned. The momentum still remains with the bears. 1295 and the descending trendline still remain the resistance levels to watch out for. In fact, the market got rejected right at these levels, that I had pointed out on Monday, yesterday. I expect this bounce to last for a few days and oversold stocks to do well in the next few days, but caution is still warranted. Take smaller positions or be quick with those profits.
Take care and good luck!
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