Technical Analysis of DSE Index on 22 Dec 2016 - Retracement scenario

Technical Analysis of DSE Index on 22 Dec 2016 - Retracement scenario

Currently, the market is strongly bullish. Thus, we could see the following scenarios:

(+) The present herd mentality keeps hold and Index remains Bullish; the party goes on; enjoy!

(-) However, I think we should also plan for a retracement scenario; if the index takes a breather.

Let us assume where the Index might reverse. Previously I had written about it in this article: http://imti77az.blogspot.com/2016/12/trying-to-predict-un-predictable-don.html

Again the market fooled some of us Technicians by resting around 4970 instead of expected 5000. 

Whether it was profit-taking and/or supply, today’s bold candle seems to have snuffed out supply at 4970. However, let us be prepared for retracement from either 4970 or 5000.

Now if we look at Fibonacci Retracements, it seems the Index might reverse from the following areas. 

I would expect it to reverse from around 4800 to 4844.

It might be an opportunity for traders to re-position one’s portfolio – by taking profit of stocks that have risen too high and trying to find stocks that are lying low (preferably around support). Or those who entered at low prices, could hold for future gains. It depends on the individual’s strategy.

Let us see what happens . . . 

Don't worry - be Happy ... if it keeps on rising . . .