One of the early indications that a market is getting set for a bullish run from a bear market is, 'The market will gap lower and then close higher for the day. It will do this over and over again.' We can see this happening before us last Friday and Wednesday. The surge in the indices continued, but we see volumes getting dried up as the Index moves closer to its immediate resistance at 5400.00. With the present indicator strength one can conclude that the next level of 5550.00 has a possibility to reach.
Weakness can come, while that will be a buying opportunity for short term traders. Value zone for tomorrow is 5165 - 5048, buying can be done in this region for short term gains where reward to risk will be excellent.
New High / New Low index is rising on the bullish side. A steady increase in stocks giving new highs have been recorded for the past few days. The count for today is 38 new highs and 1 new low.
Cements lead again with 8 out of 15 stocks listed in that space registering New highs, Banks - Private Sector with 3 stocks out of 17 stocks at a New High, Finance - Housing has 2 stocks out of 6 stocks registering New Highs, followed by Auto ancillaries with 5 stocks at New high out of 32 stocks listed in that industry.
New High / New Low is a highly useful index to follow for trading the best stock of the top performing Industry group. A new high is always followed by several such highs in the coming days as the momentum keeps pushing the stocks price up and up.
Mid Caps are doing an excellent rally while on the sectors side, Basic Materials, Industrial, Financial and Consumer Services out perform the major averages. Among the sectors apart from Utilities all the other sectors have closed positive.
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