When will the market stop falling?

by Michael Gable

The recent sell-off in the market has been quite impulsive and has caught many investors by surprise, especially yesterday's 100 point drop on the XJO. When we see markets pull back (in this case from the high on 2 May) , they can find support at the previous swing low, but should ideally not close below the second swing low. The second swing low for our market was 4143.7 which occured on 7 March. At time of writing, our market tested that level intraday but is set to close above it.

If the market is going to rally, then it will rally from here. When I look at the charts, it has the potential to make a swift return back to 4300. This will be led by our miners, which have been oversold in the short term. For some of my trading clients, we have closed off shorts in the miners this afternoon and gone long BHP, RIO, and WPL for a shor term trade. Traders need to place tight stop losses.


Disclaimer: Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.

Subscribe to our Daily Newsletter?

Would you like to receive our daily news to your inbox?