Saturday, February 13, 2010

The Week Ahead

The ASX200 had a rather large drop last week. But what will this week hold? As you can see from the graphic the market started the week slowly and then rallied on Wednesday with some large volume. The ASX200 hit its peak on Friday at 4593.


Looking at the 3 year graph for the ASX200 we can see the point of 5000 is currently acting as a barrier. This is an interesting thought seeing as this price has once been a support for a short period. It will be interesting to see if the market is able to hit the point if it will show some bullish signs and lead to a recovery out of the current GFC? I guess only time will tell. Here is the graph for you to make your own decision!

Considering this, what will the market do from now on? The market has been on an upward trend for the past few months, with a few slight troughs, this trough looks a touch nastier then ones before it. This could be due to the market re-evaluating itself, stocks that I believe to overpriced such as Macquaire Group (MQB) and Commonwealth Bank (CBA) are falling back to their true value.

Stock of the week? I think Arrow Energy Limited (AOE) is a stock to watch this coming week. I have been watching their movement for a while, they experienced a downward trend leading up a large drop earlier this month. They have seemed to recover gaining around 8% the last few days. Its movements on Monday morning may determine its trend for the rest of week. But I would be looking to get in at this current price and set some stop orders 4 or 5% below to cut any losses that may occur.

Check back Monday morning for some market insight and Monday night for the days market news.