ASI Weekly Report - Market is up because the Saviour of Mother Lanka is to come!!!

Last time, when the Presidential Election was around, 62Mn voted for a new President. What a load of hopes and dreams he gave. His term is about to end, and we Sri Lankans are yearning to see another new President.
The hopes are on FIRE, burning to the brink of electing that New Saviour with a stupendous victory. How cunning are those Dream Makers are, in creating a Drama that all the voters are knowingly and some unknowingly glued to the Movie.
Share markets anywhere in the Globe are revolved on 3 main pillars, i.e. Fundamentals, Technicals and Sentiments. Both Fundamentals, and Technicals are no match for the Emotions that strangles and bind the other Pillar - Sentiments.
Without Sentiments, without emotions that controls sentiments there is NO MARKET. But the funny thing is that emotions are not reliable not only in the Stock Market, but in all parts of life. It goes up and comes down in split seconds.
As long as the emotions are good the sentiments are good, if the sentiments are good whether or not Fundamentals or Technicals are bad, Who Cares? Where there is emotions caution takes a back seat.

But the present status is Unique. The Government made the Country and the Economy go through grinding. They followed a tightening of the Monitory Policy, Currency management and Consolidating the Fiscal side, which was the need of the hour. Unfortunately the need was only for an hour for the general public, but the need was for years for the Government and the Policy Makers. Any way both the monitory and fiscal side are now getting relaxed after 4 years. Then the Terror attacks made the valuations more attractive. Then came the Elections to its door-step. All these made the Emotions run high. As such the "Feeling Good" feeling is an all-round factor.

There were 37,873 trades during the week, which was a drop from 56,698 of the previous week. Index continued to witness more selling during the first 2 days of the week, and recovered to close higher on Friday. Although the selling pressure tried to pull the index down to the present low of 5815, that didn't happen. Thus the 5815 has managed to stand as the present support. The market is now gathering its steam to test the present high of 6047. If the sentiments and the momentum we saw on Friday and right throughout the on going rally, it could be tested in a day. However we need to see the index heavy counters leading the way with strength and volume. As the index closed at 5943, there is another 104 points to test the high of 6047.

As the market is bullish both with Sentiments, and Fundamentals are helping it in a mediocre way, One need to keep tracking the Technicals, as the trend will have wide swings. Even if you do not rely on Technicals it will be prudent to have a good awareness of the Risk involved in the market. If you don't have the mature mind set, start learning at least this time around. Always talk to your broker for sound advise, and follow your friends or others who will help you to improve your knowledge and practice in Investing and Trading.