hi. all hope you had yourself a nice holiday and are back to get mauled again by the bear ( jus' kiddin) but seriously the nse it pointing to some very bearish movement over the next coming weeks ...
Lookin at the posted chart below ( chart one ) we can see we had a very nice rally upto the top ( or close to) the upper trendline as anticipated. there's some very tough resistance around the 3300 level and i sold my belongings there.
I anticipate with the resistance at 3300 the index to test the 27xx level.why 27xx level . its because if you look at the 3 yr chart (chart one) point A,B and C reacted to that level and thus in the current anticipated downtrend the same level should lend us some support also in addition we also have the lower trendline that might provide support but it also lies at the 27xx level .the 27xx level you'll also note is where the mighty 2010 bull rally began so its a very important level.
a clear confirmation will apppear if we take out the previous low which lies at 3080 and this will set the ball rollin for the downtrend.
So why am i telling you all these . its so that you can hold your buying and anticipate even lower prices below

chart One






Chart Two

Breaking that 10yr trendline support zone @3000 - 3030 will be very bearish for a while. I'm not liking the NSE chart pattern even on the 5yr time frame. If by end of Q1 CBK will still be on these hyper rates, the market will continue being in winter mode.

Just to put my two cents on this, imo both techs and fundis support this. Technically we got the 38, 50 and possibly 62 fib levels to provide resistance and of course the trend with is south to continue course, fundamentally the econ is in a depressed state, a good proportion of local invesment has already been liquidated and foreign one is following suit given a myriad of reasons - weak shilling, elections etc.

Winters coming, storm's coming. At any one point in the n.s.e there's one company that goes against the trend, in the current relief i've noted that equity is moving in the opposite direction. This tells me that by the time the storm is over, the other stocks will take an equivalent beating. It's happened before, it can happen again. Storms coming.

Here's the way i see it .

1. if you can sell your belongings at break even then sell NOW

2. If you are planning to buy the low prices. HOLD because lower prices will be coming

3. If you have some profits from the small rally we had . sell your stocks and lockin your profits

I'm bullish 3700 by year end.

I feed on fundamental info and i'm not a big believer in tech analysis as smart money always feeds on info at hand. Kind of reminds me of EMH & its assumptions though truly speaking the down trend is not yet done especially for banking stocks, i don't expect them to replicate last year's numbers. And with the banks down the rest will follow.
Capital preservation.

What exactly do you mean by this?

@qw The chart you have drawn above shows a full cycle..it has the impulse wave (2010 rally) and its correction (2011 bear run)...I think we are at the bottom...2011 capitulation can not be followed by more capitulation...WE ARE AT THE BOTTOM...take that to the bank