ASI trying its best to hold above 2016 lows......But???

The week just finished, tested the 2016 price territory. The worst day was the 25th as the market closed at 5833. Indications were to break down below the 2016 low of 5802. The market opened on the 26th with a point drop at 5832, and then the day closed with a breathing space. ASI is enjoying that space of breathing till yesterday to close the week at 5862 points, Exactly 60 points above the 2016 lows. However the RSI has a positive divergence, with the present low being higher than the previous low....THE ONLY SILVER LINING IN THE DARKEST PERIOD IN THE POST-WAR STOCK MARKET.

The monitory and fiscal policy handlers in present Sri Lanka has a strategy which is in action for more than 3 years now. They think that strategy will make Mother Lanka PROSPEROUS in the future. It's a strategy amidst many strategies in the ocean. Results will be known in the future. You may think this will work, OR not. That's the freedom you have.

One of those lessons I learnt during the present times of horrific selling is that the people who called themselves investors started selling LIKE CRAZY. So those so called SAFE MARGIN TRADERS, who normally top up to keep the margin % under control - GAVE UP, and are giving up one by one.
Investors who sold and are selling and these safe margin traders had a strategy of holding VALUE STOCKS. But they changed gears and started looking at the value of their portfolios. Value of Stocks and Value of a portfolio normally define the investor and trader, but the investors in this case suddenly decided to become traders, and executed the STOP LOSS STRATEGY, quite confusingly with heavy losses. This is why I always reiterate that you have to define your self. If you define to be an investor be bold and hold. When the Stock valuations are becoming attractive by the day - accumulate. Those who define themselves as traders, by all means and at all cost STOP LOSS. Whether you like to read that or not it is my duty to keep you informed.

Coming back to the market, we now see a pull back if it were to happen based by the positive divergence on the RSI, will test once again the 2017 lows, which now sit as the RESISTANCE.
Conversely if the present downward slope to pause, the SUPPORT at 2016 low of 5802 should be respected. Otherwise the fall would bring the index down to test the 2013 lows of 5600.

ASI fell below 2017 lows, now heading towards 2016 lows........

Many did not want to see what's happening to the Stock Market right now. So many Traders and Investors are running miles away from the market already. So many big names are not to be seen, as if they have gone out of the country, or hiding. The way things are unfolding it is most likely that the Index will test the lows of 2016, around 5800 points. Any stop and reverse at that will be a relief, but for how long. Some are thinking that the fall is due to the USD hitting higher against the LKR. But then how come the Indian Stock Market is following the Dow? Indian rupee has fallen 17%, while the LKR has fallen only 7%. The valuations of the Colombo Stocks are laughing, but no one wants to invest, NOT EVEN THE LOCAL FUNDS. When the big traders or investors are not in the market, even the small timers won't, WHY? because they are copy cats!!! Today the Politicians are telling how the funds should invest, as if they have made this country prosperous except themselves. If one was following stop loss the damage would have been so low, but how many did? Many are not bold enough, and have no back bone to do so. Do not ignore the market as the more the market falls the more valuable the stocks are going to be. Let's see how many would be bold enough to do so.......