Descending Triangles by definition are bearish, but it comes in handy to track during a trend reversal. So much important when the momentum is turning up to be bullish amidst the bearish sentiments, in the overall market. That's exactly what is happening at the Colombo Stock Market right now. When all sounds bearish we need to look closely for reversals to move out of the pack and think out of the box. The hourly chart which is tracked at the moment indicates a bullish divergence simply because of this bearish formation on the Index line whilst the RSI is showing a bullish trajectory. As the Index is forming a base between 6000 and 6100 the present behaviour allows bargain hunters to BUY the DIPS.
Buying the Dips is for those who think the way forward of the ASI is bullish. An important role towards this will be played by the Banking Sector Sellers in the next week. Why? Because the Government requested the Banks to suspend the recovery of loans given to the SME sector. Naysayers as usual is preaching doom, obviously this is a challenge and a concern. It will be interesting to see how many naysayers are going to come running to sell from Monday. Those who would think about this whole new thing Pro-Actively would come in for bargain hunting. Therefore the fight is between the bearish naysayers and the buy low bargain hunters during the next week and beyond till sanity prevails.
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