Indices deeply oversold, ready to bounce!!!

World markets was given a stunning economic blow of trade war, no one expected that this will happen, thus a shocking response from stock market.

In any major selloff, indices have a tendency to touch 200 DMA, in extreme cases it goes below and then turn around.

S&P 500 is hair above 200 DMA and may dip below before turning UP.

DOW may do the same, all possible on Monday open.......

Nasdaq remained healthier, its half way between 50 DMA & 200 DMA.

Last week was the worst week in last 16 months, a record rarely attained in stock market.

Most stocks are either $20 down or are near 200 DMA....a rarity in most times, unless we are near a major bottom.

Friday had the feel of  " too low too fast "

We are on the verge of making a " u turn " north.....

Except for few exception, same strong stocks will lead this rally...AMZN NVDA NFLX  to name a few....

It will be a good idea to revisit your portfolio and see IF any swap makes sense.....

New funds allocation to equities near low is a winning strategy.

Initial target of indices should be towards 50 DMA......

For equities depending on which stock we are talking, talking 20 DMA, 50 DMA is a good focus.

Hoping, we have seen the low or pretty close to low.

Good luck with your own analysis and comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed