Tuesday, February 27, 2007

The faster it drops, the quicker it stops

Following the bearish engulfing black candle, the KLCI had a 35.79 drop to 1237.08. This is the biggest one-day drop in the last 5 years. At one stage, it was down 52 points. Volume was high with 3.6993 billion shares traded.

China had the biggest one-day drop in a decade. The Hong Kong & Singapore markets were down as well.

What is likely to happen tomorrow? Should there be a panic sale, it is a good time to go in for some bargain hunting. A panic sale is one when there is fear in everybody’s face, heavy turnover and a very steep drop. Watch out for this scenario though I think there is unlikely to be one.

If 1223 is breached, 1190 & 1165 are the next support levels.