Posts from now on shall follow a specific format. This shall give readers a better and more systematic view of daily insights. And YES! Daily posting shall resume since there is something new in the market everyday.
Today's Market Action:
The local market surged 41.58 points today to close at 2934.12. CityDev led the Top Gainers, up $0.400 or 3.7% together with other index weights. Call Warrants (CW) dominated the Top % Gainers. Gold 10US$ led the Top Losers falling $1.52 or 1.6%. Standing with it are Put Warrants (PW). Top % Losers include blue-chip Calls and index Puts. The STI seems to have moved closely in tandem with the HSI and the N225 for today.
My Insights and Opinions:
The market has kept within my estimated band of 2900 +/- 50, hitting a low of 2862.27 on the 3rd of July. The current uptrend seems strong but a little too strong to be sustainable in the short term. Relative Strength Index (RSI)* from the 3-month chart shows that the market is moving into "range" territory between 40% to 60%. That can be a good sign in times of economic weakness. A future breakout may indicate a start of a recovery.
CW in the Gainers with PW in the Losers are a clear sign of a very short term uptrend. However, due to the implied volatility that CW and PW are subjected to, this clearly shows the volatility and corresponding uncertainty of the current market.
Considering the above points, my view on seizing opportunities still hold for a longer term outlook. However, current prices are unattractive in the short term.
*RSI = 100 - 100/(1 + RS) where, RS = Average of x days' up closes / Average of x days' down closes
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