End Of The Financial Year Frictional Resistance Dampens The Bull Run!!!
As we arrive at the end of the financial year and the deadline for reducing Debtors to 50%, the market is experiencing some frictional resistance that may ease in the first week of April. We expect the market to recover and rise sharply by the middle of next week as firms start establishing strategic positions for the new financial year.
Trading in Guardian Capital (WAPO) dominated trading yesterday as it appreciated significantly from the previous day’s close. GREG group shares and warrants rose as CLPL announced a dividend but the gains were clipped towards the close as margin constrained players took profits/cut losses. Margin call related forced sales continued to hamper the progress of the market as margins have to be trimmed down to the 50% level .MPI still remain under pressure awaiting the arrival of significant institutional buying. Yet there are as many as 43 recent BUY signals in our technical signals summary today (attached).
Despite last few days’ turbulent trading at the market the RSI’s of ASI & MPI daily charts are still at a modest 45 & 43. ASI and the MPI are now rising gradually towards the Middle Bollinger Bands providing some hope for the future. RSI’s of the ASI and the MPI are still below Neutral Level (below the 50 level). We reiterate the fact that the market has plenty of scope to move up significantly from current level. We still stress the likelihood of an unprecedented bull run in the market during the coming weeks.
Considering the current level of the underlying securities their warrants are being traded in the market at grossly underpriced levels. The extent of undervaluation of most of these warrants is evident from the extract of relevant information from our warrant price calculators given below. (pl. see our warrant price calculators at our website’s research section.)