Saturday, May 14, 2011

BETXT Index Correction

The last year high target (around 620) was not reached as expected and discussed in a previous post, the index reversing at the less known 78.6% Fibo level as shown in the weekly chart above and daily chart below.

During last week the index was also affected by dividend adjustments that sealed the break of the daily EMA50 support. Though the negative influence of the dividends may be seen artificial to the index and stocks in general, the collective market memory is not adjusted for dividends and is more likely to react to the same technical levels existing before adjustments. The same rationale is also applied to index composition changes (e.g. recent FP inclusion).

The downtrend should be halted in the important 500 points area (round number, rising daily SMA200 and 1-year recovery uptrend line + rising weekly EMA50) unless long term monthly uptrend is broken and reversed.


Sergiu said...

Ce crezi de evolutia bet-fi avind in vedere ca a spart suportul de la 25.000?


Florin TOTH said...

Salut Sergiu!

Parerea mea este ca ruperea nivelului 25K (cauzata in mare parte de greutatea dividendelor) va readuce in atentie zona puternica de suport din jurul lui 22K care tind sa cred ca va rezista daca indicele va ajunge acolo.

Daca va merge mai jos de 22K (intr-un context international nefavorabil) probabil ca va testa zona 18K - 20K care cred ca va fi greu de strapuns.