Bullish momentum remained intact. Favourable external backdrop with global equity markets continuing to chalk up impressive gains underpinned by a growing believe that the worst of the crisis is over couple with historical low interest rates had sustained equity as an attractive asset class.
Technically, all indicators continue to point north with expectations of another positive start to the week. Investor psychology is now firmly entrenched in the positive with negative news discounted as many are now training their expectations of a potential V-shaped recovery. While jury remains out, general consensus seems to favour a quick recovery and hence the recent strong equity performance. Augmenting the recent uptick could also be due to some “short squeeze” as a result of the recent pandemic while the quicken uptick of late had also instilled much fear into the sellers which had been restrained.
CI’s immediate upside is pegged at 1,037 with 1,070 – 1,100 levels as next which we believe will be a greater challenge for the bulls in the near term. While volume had expanded tremendously in the near term, caveat however on the quality of the recent run-up which was centered mainly on the lower liners. Retail participation had undoubtedly increased and so is the level of greed. While we maintain our positive stance, we would also like to recommend investors to top-slice as the CI moves towards our envisaged 1,070 -1,100 level.
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