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Wednesday, February 6, 2008

passion is on the way...

Long time no seen.. :)

It's been more than 2 months since my last post here... The time was full of emotions, fears, hopes. Many people didn't believe the downtrend could take so long and worst - to be so intense! These months we've seen the record of daily fall of SOFIX broken twice - one day it fell about 6%, and only 3-4 days later there were another almost 8% downfall. Since the beginning of the year the overall decline became 20-25%. The prices went to levels not seen for an year. The situation was especially bad on Jan 22nd when the main index of the Bulgarian stock exchange open with a huge gap on the downside and went to one of its lowest points for a year ago - a value of 1233. There were simply no buyers on some of the most liquid positions.That continued for about half an hour and then one by one the stocks put to be sold were consumed. The day closed positive at values about 1384, only 3 points below its highest point for the day. The loooong legged doji was very well formed :) Still the indicators showed there was much fear and the next days prices continued slowly to fall. The volumes though were half the ones before the big fall. As if suddenly half the people stopped trading. Most of the players were not sure where the market would go. Moreover they were scared. Human mind is an interesting thing.. :)

The volumes lowered, the prices - also slightly.. The books say the bottom might be near. On the daily graph the market became more and more oversold. Till one day there were massive buy outs on some possitions. The volume doubled for that day. On the next one things repeated but with more players taking part. The crowd started looking around. Is it over?... After that there were some days of swinging up and down... But the bottoms were higher than the previous ones. On the weekly indicators still point down and they have a way more to go but today /06.02.2008/ we have a bullish macd crossover on the daily graph. And from a very low point. That could lead us to the level of the next resistance - maybe somewhere around 1480-1530. If we don't cross that one /and since the weekly points still downside../ we could swing up and down between 1500-1300 for some time.. :)

The last month the companies reports for the last quarter of 2007 were issued. One could find them on the site of the Bulgarian stock exchange - or through the new service presented by a leading bulgarian investment site - Some were good and some not so much. It seemed that everything was already into the prices.

Bulgarian market is a developing market. Because of the very low base the prices of some assets grow very fast. One such asset is land. Many public companies own land that is bought long before the prices achieve the nowadays levels. And it's calculated in their ballance sheets according to the price of achievement. The price of that asset could not grow forever with the speed it used to. Many companies could decide to recalculate their assets so they reflect their real market value and thus expanding their actives in the sheets. There are examples in the ballance sheets already. This could lead to a new way of attracting fresh money into the company - by selling something they don't need. Time will tell.