Before the fall of stock prices last Monday, 7,200pts is the strongest support of the index (refer to the graph) it has been tested thrice, and always keeps the market index afloat. This is the price range where everyone wants to enter. Every time the stock prices touch the support line it bounces up not until it was broken last Monday, then it becomes a new story now.
The 7,200 now becomes the new resistance where everyone else would want to go out. 2 points either to the investors who entered at 6,600 or investors who were stuck at 7,200. If this is the price where every one wants to go out. Selling activities are so strong that will keep the market price to go down.
Currently, yes you are correct that the market prices are going up so are you gonna start buying now? My answer would be patience until you have confirmed if 7,200 will be your friend or foe. Friend if it will be broken and will keep you afloat and support your prices all the way up. But it can also be your biggest foe which can impose a resistance force that will push the prices in a downward trend.
What if you have bought at the current prices. Lucky for you if the succeeding events will turn out to be favorable on your end. But you will be sorry if it turns out to be the other way.
7,200 has not been tested or touched by the market price until now, but we all know that it is now a resistance. But how long? Only the market can tell.
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