This week was an important week for our market. As you can see by the below chart we had a positive week; so too did the US. Although it is way too early to call a recovery, what we have seen is good support for our market at 5100.
We also saw good support in the US for the financial sector, which was emulated in our market. Last week could indeed signify the bottom of our market but don’t celebrate just yet. I am not suggesting that the market will bounce back straight away, no!
As you can see from the below chart we are still trading below 5500, I would expect to see the market recover to this level over the coming weeks and then continue to trade in the 5500 to 5850 band until July this year. Why? Investors will be looking to see company’s full year earnings for the 07/08 year and see what growth in earnings companies are forecasting before committing heavily into the market.
Where does this leave the retail investor? My call is to accumulate in this market, look for stocks which are good value and buy with a 3-5 year time frame. It is also a good time to sell out those underperforming stocks in your portfolio.
Until next week.