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Since my previous post on Reasons to start bargain hunting,

  • Dow has hit high at 8831 on 28 Nov - that is +9.8% based on the close at 8046 on 21 Nov.
  • HSI has hit high at 14108 on 1 Dec - that is +11.4% based on the close at 12659 on 21 Nov.
What to expect after Dow plunged 679 (-7.7%) on 1 Dec?
Buy on weakness, and these are the reasons:
  1. Dow's positive divergence confirmed when it surged above Red trendline and 14dMA.
  2. Dow's multiple support levels - Red trendline, 8000, 7882 to 7286 (strong support zone).
  3. Dow has ignored bad news during the 5 days winning streak - a sign of bottoming.
  4. US has officially declared that they are in recession since December 2007 - this means that they are already 11-12 months into recession. Based on the past 2 global recessions which last about 16 months, there are 4-5 more months. If market is 6 months forward looking, October-November 2008 may be the bottom.
  5. HSI shows a higher low at 11814 as compared to previous low at 10676.
  6. HSI likely to test recent high at about 15000.

1 comments

Kay said... @ December 4, 2008 at 12:48 AM

Hi,

I'm Kay from moneytalk.sg. You mind if we exchange links between our sites ? I can be contacted at kay@moneytalk.sg. Thanks (:

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