ASI - Not wanting to go below 6100......but how long?

2016 was a pretty bad year for the Market, with the Index plummeting down to 5800 points. If 2016 was bad then 2015 was worse, where we saw the index falling from grace. Period from June 2012 to January of 2015 the Index recovered and it was a graceful uptrend. In that sense worst started happening from that time to date. However something wonderful happened when the Market fell from this so called grace, it became humble. How? By bringing down the Fundamental valuations to that of POST WAR period. This humbleness brought humble participants to the market. They are the Foreigners and the SMALL RETAIL LONG TERM INVESTORS.These are the only 2 types we saw in existence during the War torn periods, and now they have come back.

The Foreign contribution  is huge in terms of turn over, but it confines to a few accounts, in contrast the number of Retail Long term investors are many but the turn over contribution runs into Tuppence compared to the turnover contribution of the few foreign Funds.The sense of busyness that comes in to play in a thriving Sri Lankan market happens when big turn overs flow from short term large traders, who would carry the brunt of risk taking and eventually end up within the confines of manipulation IF they do not play the game by the rules. The ones to follow them will be the LARGE RETAIL SHORT TERM TRADERS. These Large retail traders aren't like the Small retail long term investors. They put huge money, most of the time risking every penny they could scrape and extend their gluttony by borrowing through margins as well. This high risk high reward players cannot be found in the present market even if you want to search them by going from  house to house. It wont happen until the market gets the right blessings.

In this background how long we would see the support at 6100 is not clear. But the ASI need to hold above 5800 points to avoid a trend breakdown, and should hold above 6000 points in the short term to bring hope and strength. At present that strength can be maintained as long as the Fundamental valuations of the counters continue to the future. At the moment the pessimism and fear bulldozed by external forces will not help to believe in the HOPE or STRENGTH, which will only happen by visually seeing it happening in their performance on a quarterly basis.

Until the ASI is holding above 6100, 6000 and 5800, the short term hope for an uptrend is in tact. Therefore the present level suggest a semblance of hope for the Bulls, and a gunny load of hope for the Bears.