SOFIX - Up to a New Record

Last two working days were marked by new heights of Bulgarian stock indexes. Yesterday all the four official indexes of Bulgarian Stock Exchange finished on positive side. The growth of SOFIX was less than the day before, yet BG40 continued to grow in more than 2%. As BG40 usually /because of its structure/ never drops for a long period of time /except when there is a veeeery major down trend/ I personally consider its movements more like an extra tool used to confirm the main conclusions made when analysing SOFIX.

Here are some pictures:

The first one is a daily graph of SOFIX and the second is a weekly one. On the daily graph I see a MACD divergence /the red line!/ which is followed by a fall in the prices and the MACD. The prices fell to the bottom line of the bolinger bands. At that point they started to go up again. The value of SOFIX passed its previous highest point and now it could rally for some time. The reason for that could be found on the second graph where the up-trend of SOFIX is still alive. The MACD line is above the trigger /signal/ line and moreover - the trigger line has positive values. MACD goes very high which possibly could mean the end of the trend is close but for now the up-trend is still active. The red line shows the point when the MACD divergence appeared on the daily graph.

Given this analysis /and some macro economic conditions/ one could expect higher points of indexes and new records in prices. We'll wait and see. And try to never forget that hope sometimes is our worst enemy!.. :)

This is just an analytic point of view and not a recommendation to buy or sell anything.