ASI - Touched the 161.8% fib extension @ 6267 points

It was only yesterday I discussed that the ASI could test 6267 points - 161.8% Fib Extension. It closed at 6265 points a drop of 52 points intra-day. Whilst there are no signs of a reversal based on indicators, we saw some support coming to the market giving a ray of hope. Tomorrow and day after will be decisive as we could see more clarity in the change of direction. ASI is once again heavily oversold with the RSI at 16.8 points. It was 13.60 in August 2017, from which point the index reversed to recoup 300+ points in a matter of 2 months. Therefore the importance of the next 2 days become apparent further. Can we hold 6225? Can we hold 13.8 on RSI?

ASI - Slope persist. No change of momentum.

On the 8th of June we discussed the ASI, when it moved into the support channel. Sadly the bears prevailed for the next week as well. Today's behaviour was no better, thus the index pierced through the support channel. It is heading down to 6267 points. Index broke down from the previous low of 6316 points reported on the 19th of December 2017. So did the RSI which is now below the previous low of 21.94 points. The formation of the momentum indicators do not show a reversal of the trend just yet. Earnestly hope the a reversal would happen above 6267 points, which is the 161.8% of the fib extension that is being monitored right now.

ASI - Dipped into the Support Channel

On the 31st of May 2018, We discussed the ASI based on the Fib Extensions. We were expecting the Index to dip towards 6371 and below upto 6320. The image that was shared is given here:

The price line was above the light blue coloured channel. Now you can clearly see that the price line has come down into the channel as given in the image below.

We have seen on many Fridays that the ASI use to recover and close with a long tailed candle. It happened today too. That doesn't say that all is well with the index. Need to see the candle on Monday to  close above today's with considerable change in the momentum. If not the dismal performance on the ASI will prevail for quite a while.

Aitken Spence Plc - SPEN.N.0000......Expected Target 57.70!!!

SPEN.N.0000 makes a potential counter which will have a short to medium term rally from now onward. Strong volumes can be seen changing hands in the last 10 days, within a range between 50.00 and 53.00, overshooting to a high of 56.50 in the interim. As such 56.50 remains the present Resistance and the Support being 50.00. In the short term we could see the stock re-testing 56.50. If it's not going to break out there, then the stock will pullback to the top of the range at 53.00. Once the consolidation is complete around 53.00, we could see a check at 56.50. Based on the volumes changing hands at that, thereafter we can expect a break out to test 57.70. The uptrend can finally test 59.50 before a short term correction takes place. If the said rally ends between 56.50 and 57.70, and try to move side ways in the range between 50 and 53, you must stop below 50.00. Until it closes below 50.00 on strong volumes you should not stop the trade. A rally will be strongly supported provided that the Company will continue to show positive fundamentals.

ASI will find support within a range below 6371, based on Fib Extensions

The highest the ASI reached thus far this year was 6605 on the 21st of Feb. Then it hit a low of 6417 on the 28th of March. Thereafter it reversed to test 6605, but failed to move up there. However the top at that was 6561 on the 18th of April.  Fib extensions were drawn based on these 3 points. The completion of the 1 time down trend is around 6371. Mostly the ASI up or down tests 1.27 area, and that is around 6321 points. If the trend is not going to change at the present levels, it will certainly test this range. Any trend change will 1st test between 6450 and the 100sma at 6492 points.

Plantations - Stay away until the direction is clear

Plantations were the best performing sector in 2017. But the exuberance created by way of price action in the Stocks has not been able to be supported by Profit growth. Additionally the newly emerged tension between Iran and the US has made the Iranian currency to be highly volatile. Apart from this how our Exporters maintain the shipments flowing to the country needs to see clarity in the short term. The effects of adverse dry whether in our closest rival producer i.e. Kenya is back in business better than  last year. As they were faced with the drought last year the prices for all elevations fetched above averages primarily during April and May of 2017. Comparatively this year it is not so. Traditionally the volumes of tea at the Auctions increase in May, which sparks a momentum to follow through in the months ahead. With lower prices it is not encouraging to expect higher tea volumes coming to the auctions throughout this month. On a positive note the Prices between Jan and March of this year had helped the plantations to record a higher turnover but the reflection of this performance may come in the results in the Quarter ending June 2018. Even then the the important factor will be the annualized performance. For those Plantation companies with a combination of Tea and Rubber, the bullish world oil prices is a positive signal. But it has not turned into Profits at Estate level as yet. These practical issues  are reflecting at the moment in the Price Chart of the Plantations sector, where a long consolidation is taking place since the retracement that took place in October of 2017. At present it is important for the Index to find support between 900 and 920 points. Any breakdown below will test the next support area of 800 and 845 points. For the index to head higher, a break out above 973 must take place. As such it is ideal to stay out and watch.

ALUMEX - Under pressure

Momentum in the Market has a telling effect on Alumex for the moment. Any positive sign in fundamentals will test the fate of the counter in the short term. An important support was broken. Paving the way for the stock to be under threat by the bears. 16/- acts as a psychological support. It is still early to initiate a buy after the trend failure. Let's watch.