BREAKOUT OR FAKEOUT?

NSE ASI did an amazing leap of 513.42 points today closing at 25,836.29, on an aggressive action as news of  Zenithbank hit the market with a bonus of 1:4 and dividend of 45kobo. With news like this, it is not hard for the market to be news driven rather than technical driven.

Some school of thought are optimistic about current activities and describe the whole scenario as a BULL TRAP waiting to happen and market is over-reacting to a lot of things that will create problem if not well managed.

Others believe positioning for Medium/Long term will get better returns than placing the funds in the money market earning 2-5% P.A.

For now This current rally is likely to BREAK 26,000 points resistant level earlier predicted and seems to be eying its July Highs of 2009 within 26,000-27,200points range.

If the Index fails to make a significant up day over the course of the week, then this will be a FAKEOUT. However, even if it does retreat, I still see strong support at the25,000 level, so this is still going to be a volatile and tricky market to trade. In fact, I am currently of the belief that the 30,000 points level might represent the High of this crisis and that the market would go largely neutral from here.

My opinion from a support/Resistant tables show signs of some stocks hitting the resistant levels soon.

Tomorrows rally will definitely give us a clearer picture if this rally will be sustained.

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