Global markets closed on a positive note for the 1st week of 2012, this is a indication that 2012 might be a positive year. Though it has been proven, but there are times where this theory fails us, for example STI in 2011 - STI lost close to 17% in 2011 despite it has a good first week in 2011.
The market is dynamic, conditions are changing everyday. Markets tend to react differently from what people thought it should be. Therefore, we have to understand what is the market doing at this juncture, and what will be its next step.
Enough being said...
Last week I mentioned that STI has high probability that it could come down, looks like i was wrong. Nevertheless, I found out my mistake, so I will improve my analysis in the future.
But the rally did got resisted by the 50MA on Wed.
STI is currently in a overbought condition and there are signs that profit-taking or some sell-off will take place. But anything could happen since the markets will wait for what comes out from Europe next week.
*Do note that US markets are already in overbought condition and the chances are high that it might turn down next week.
I was wrong again. Market was really in a super bull mode.
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