Thursday, August 11, 2011

Falling knife

As mentioned on our daily email STI has fallen below the major support 2920, before we go above this level we should be cautious and wait for reversal signal! Don't anyhow buy lower and lower, averaging down is for long term investor who can hold for few years to do(using cash, not CFD), not for the common people who have only 1 set of fund. Again, always apply stoploss.

For market to turn there are a few signs to note:

1) The decline in index need to slow down, not falling by 100 points a day for Dow Jones. That is the first sign of a turning point.

2) A decline in volume on down days. This is a sign that Bear players are diminishing.

3) 3 consecutive green daily candles. This is a sign of return in confidence. Blue chip up 4 out of 5 day.