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Wednesday, November 28, 2007

Is The Correction of SOFIX Over?..

OK. As expected the downtend took place. Already almost everybody admits it. The main question now is for how long it will last.

These days good results came from some of the market leading companies. That's fine. Will it turn up the trend?..

Two things:

This is a daily graph of SOFIX. Its value fell to its first support. Today the index started to go up. MACD is very low /but still negative - MACD line stays below the trigger line/ so the market might be oversold. As it is showed by the black horizontal line the index touched the support at 1636/40 and bounced back. The hope says it might continue to go up and the correction might be over... But that says the hope.. ;)

The second thing:
This is the "bad" graph. MACD is still very high and moreover the MACD line crosses the MACD trigger line from above. On the daily graph the fast MA is below the slow one. All these might show the correction has some more way to go.. The first aim is the second support marked by the red line on the daily graph and the black line on this graph. The red circles shows that level - around 1536/40.
The two MAs show the whole trend is still upward, even though the value of SOFIX for the last week fell below the fast MA.

Given these thoughts we might experience some more downside movements, even not in such a fast way as the movement till now. Time will tell... :)

Wednesday, November 7, 2007

An interesting month..

October was an interesting month for the Bulgarian Stock Exchange. Volatile and struggling.. At the beginning of the month the values of SOFIX on the monthly and weekly graphs flew away and above the Bollinger Bands. Stochastic indicator showed the index was overbought. So normally things /the growth/ started to slow down. The first shot was a big red candle on the daily graph. The next day it was followed by a huge gap and the index closed about 4% down from its absolute height formed the previous day. This was unexpected from some of the participants in the market /as usual/ and the index started to go up again as the buyers got more active. After a week it attacked its previous highest point but didn't succeed. At that time MACD crossed from the above the MACD trigger line. So on the daily graph the trend started to show negative attitude. From then till the end of the month there were two more upward movements. After the last one followed a sharp decline again. The fear spreads wider... :)

The weekly and monthly graphs still show positive trend /the MACD line is still above the trigger line/. Till these graphs are positive there are still chances for the bulls to try to stop a deeper decline. Will this be just an opportunity to sell at a higher levels? Time will show....

The month was full of interesting news from the investment market also. The IPO of the construction holding /the company works on infrastructure projects/ TRACE PLC. was 1480 times oversubscriben /!!! - a record for the Bulgarian Stock Market and maybe amoung the first 3 or 5 biggest in the world./ The shares are expected to be listed for trading in the midst of December. The money for that IPO was not to be deposited when giving orders for participating in the IPO so many people gave orders for sums that enormously exceeded the money they realy had. The players on the market expected the money released for taking part in the IPO to be poured back on the market. But according the conditions of the IPO there were not so much money drawn from the market and obviously not so much money to be put back in it. That could be one of the reason for the sharp declines that happened.

There were publications from some of the main investment intermediaries about the high prices /according the fundament/ at the market that stirred the spirits also. Some considered them as a manipulation of the market while others said it was fine that at last someone is brave enough to say it loud.

But as a famous person said "As one seeks the reasons, another one eats the fruits"... :)) Sometimes the reasons remain unknown. Or uncertain.. A newspaper says something, persons give interviews... The strugle is on its way.. :) The mind has to be free.