by ckchoy
Today is an interesting day. Refer to chart 2 - intraday, where HSI hit a bottom around 18600 and rebound about 400 pts before dropping back slightly. This is a scene that has not happened before recently. 2 questions;
1) Could the bottom found here? 2)Will the trend starts to reverse up?
Bottom out?
1) First sign met where HSI hit a bottom and rebound 400 pts and stayed, a very good sign
2) If market stay resilient ( refuse to drop much ) despite bad news - this will be another good sign
Trend will reverse up?
3) If market can slowly trend up and market volume must continue to build up and improve
What does it mean?
If the rebound is purely technical ( due to oversold ), it may not mean such bottom found then we must rush in to buy. Because the bottom might have found but still need time to build up a sustainable uptrend, and it may take time, let's say another month to 3 months.
What should we do now?
1) We can use the HSI 18600 as reference and buy when prices near there. For specific counters, we can use the lowest points as guideline, eg today lowest for Kepcorp 9.8, NOL 1.00, YZJ 0.91 etc.
2) For conservative investors, take your time to buy, if possible get as close as today's lowest point. Watch whether volume improve for better confirmation that market is ready to reverse up.
How about HSI breach down 18600 again?
Technically, we should cut loss. But do observe and come back because we may not be too far from the bottom. A better ( but not easy to follow ) way is to use buy-cut-buy strategy
chart 1 - daily
chart 2 - intraday
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