What to look for in the ASI during the week ahead?

ASI no doubt tried to move towards the heavy resistant area coming from the previous rally. But stalled short of the 13th October high of 6648 points. Fridays close was lower than the previous day. The high of Thursday was higher than Friday's making a lower high in the daily candle. This is however happened within the present uptrend with higher lows, that started from early September. Therefore we need to bow down to this up-trend until we see a failure below 6346 points, which happened to be the trend reversal that occurred during the start of the trend. As shown in the chart the market is sitting within a trend line drawn by connecting lower highs, and another line connecting the higher lows, which is a typical symmetrical triangle, that happens when the market is wanting to find a direction. As we are at the tip of the 2 trend lines the massage is clear. Any thing could happen either to break out of the top line or the bottom. Therefore having long positions to trade may not be the best, until a trend continuation is confirmed by breaking out of the upper trend line. Stock specific trading strategies would be more preferred than trading stocks based on the ASI.

ASI Today - 26.10.2017. Blue Chips ruled the day

Turnover was LKR 1.17B. Mainly from the blue chips. The retailers too had their say in some of the counters. SAMP was the biggest performer having a T/O of LKR 240.8M, entirely in the Normal board. CCS,HHL,HNB,JKH and LLUB helped to beef up the T/O. Whilst the retailers commanded the speed in counters like BFN,TFC.X,JINS and SIRA with higher trading numbers. All in all there were 5143 trades.

It was a good day as many counters, large counters in particular kept the market alive. Expect this momentum to persist tomorrow too, as the demand for the Banks and some blue chip counters are still intact.

ASI edged over the top yellow trend line I was showing you yesterday. It is now trying to test 76.40% fib ret line at 6670 points which is only 40 points away as the ASI closed the at 6633 points.

Main catalyst for the market to be buoyant will be the quarterly announcements and the bullish international markets. Some are pinning hopes on a positive business friendly budget in November as well. As such there is a confluence of   many positive developments as against the negatives.

Surpassing 6670 points will open up the index to face the strong resistance coming from the top end of the previous rally. That is something that we need to watch now. If the market is going to pierce through that channel of resistance then the BANKS must perform very strongly. Let's hope for the best.

ASI today - 25.10.2017. Retailers showed robust activity

ASI mainly belonged to the retailers today. If you happen to be one such retailer, ask yourself, as to why you were wondering when many of your type are out in the field.

BFN, ACL, MAL, SAMP, MASK, GSF, CFVF, and VPEL were the stocks that they could participate quite liberally. Alongside there were Investors who picked up Stocks such as SAMP by paying premiums, showing the confidence behind the Stock.

Total T/O was LKR 892M+, out of which 38% was through crossings, whilst 62% came from the Normal Board activities. We witnessed 5946 transactions. Up over the last couple of days.

Some of the blue chips are waning out in the likes of JKH. But there was a block trade on it. Hopefully a foreign buy. Banks hit another round of a Trend continuation, after a slight consolidation. Plantations are not that attractive, which is understandable after a non stop trend extension. However there is steam in it until the results are announced.

ASI is testing a critical area of resistance between 6610 and 6620, as it closed at 6615 points, with an intra-day high of 6622 points. We need to see a strong breakout from this area. Possibly it would be the banks and some not so regular blue chips such as BUKI helping to do so. Watch it.

ASI Today - 24.10.2017. ASCOT bought over by Foreign/Local Investors

Some lucky Traders capitalized on the ASCOT deal as it went up from 32 to 44.50 during intra-day trading. This was due to a group of Investors both Local and Foreign bought more than 44% upto a high of 42.50. When the 1st block crossed at 42/- it was trading at 33.00 in the normal board. This made the traders to JUMP AND BUY from the sellers. The lucky traders managed to grab roughly about 50K of shares below 38.00. They were the most benefited. A Mandatory Offer will be made at 42.50 as the Investors have exceeded 30% trigger.

More than LKR 250M worth of T/O came from ASCO, whilst the Balance LKR 490M, were shared among others, in a total T/O of LKR 743M+.

Another stage of the Plantations rally is on, and would exist till the Sept results are out. Yet this sector is highly volatile, which is famous for versatile surprises. Hence caution is the best medicine.

A further 17 points were added to the ASI today, and it stood at 6588 points in the end of trading.
Market was a bit busy today than yesterday, but has a long way to go.

There is a resistance around 6600 points to 6620 points. Need to see whether it will be respected.

ASI Today - Billion Rupee T/O, but mediocre activity

More than 500M came from 2 block trades in Sampath and Softlogic Holdings. Central Finance had a lot of attention today with more than a million shares trading, bringing in 120M+ in T/O.

The rest of the Market did not make any surprises, with the Index closing lower by 2 points. Plantations did a slight come back, after a few days of side way movement.

The ASI is still around 6570 points, with a side way consolidation. Eventhough the overall market is hanging in the balance there are opportunities for the active well planned traders. Whilst there is value to pick for the Investors too.

ASI Today - 20.10.2017

Today's highlight was Chevron Lanka plc. This stock got hit so badly for many a month. Onslaught on the share was understandable, as their Market share and the Profits Dropped. Things got better in September. Their profits were better than the June quarter, and the dividend was slightly better than that of July. Investors rushed in to celebrate, and took it up to a slightly higher level. What closed yesterday at 112.70, closed at 118.50 today. Volume was also commendable.

There were many interesting stuff that happened in the Market besides Chevron, Sampath was traded for the last day before going XR on Monday. There were many collectors on that due to the arbitrage profit you could get. The busiest in the Plantation Co's was LDEV with more than 338k was changed hands.

T/O was lower at 568M. SL20 Stocks did not bring any surprises, hence it was business as usual.

ASI picked up thanks to Chevron increased by 17+ points. The 50% Fib ret of 6558 held, that is positive.
As shown in LLUB and VFIN, the market is positively responding to increased profits and growth in the quarterlies, which can keep the ASI busy in the coming weeks.

ASI Today - 19.10.2017

Turnover was over a Billion at 1070 M. That was significant as 725M were from the normal board, whilst 345M came from Crossings. JKH, NDB,SAMP and LLUB saw 553M worth of Turnover, making the bulk of the contribution. A special attention was given to TESS today with more than 7.5M shares trading among 412 trades. LLUB was the highest Traded with 500+ transactions, and 91M in T/O.

Overall the Market wasn't that active, but saw traders going about accumulating many Stocks in Plantations, Finance and Manufacturing sectors. Nothing out of the ordinary was witnessed except in TESS. Better watch that out as the volume traded was significant to ignore.

ASI has now come back to the 50% Fib retracement area that I plot at 6555 points. That is a critical support level. However it will be interesting to see whether it will hold above 61.8% fib ret at 6508 points.
There is no sign of a momentum build up yet in the ASI, which is closely watched.