Market was under pressure again today after the weak follow through performance yesterday. We had established a pretty strong support level right at 64 cents which was also just above the key support level on the chart holding the uptrend pattern in place.
However, today was the last trading day of the month and just like in October, there was some spec profit taking which could not find any buyers as we broke through this technical support level and uncovered spec sell stops.
This lead to even more bearish option activity mid way through the session where an order to buy 5,000 68 H'08 puts for an average of 500 pts gave the market another hit which bottomed out just under the 50% retracement level from the highs at 71.45 Volume was impressive with 42,000 futures and 37,000 options as the market looks like it is struggling under the new crop harvest pressure.
The dollar has managed to stay positive which is also weighing on most of the commodities and this has kept the equity markets moving higher. Will have to wait and see if we get any follow through demand from this break in prices, but it is looking more like the market will need to go lower to uncover demand in any large volume. Short term the price direction will be under pressure but should find scale down support near 62 cents.
We were seeing good long term buyers all week on the downside and expected more follow through higher today with the large decerts this week but it did nothappen. Volume was not behind the corrective bounce on Wednesday and looked more like a dead cat bounce that has further downside.
Technically we broke the H'08 6-month uptrend line, and demand still appears slow. The stock market continues moving higher with more confidence in the financial market, and the dollar is showing some life despite the market feeling confident we will get another cut in interest rates.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
