Market Technical Rebound Started

Note that even if in a downtrend or bear market, there are bouts of rebounds, shorter term averages tend to converge with longer term averages if the former is too distant from the later one, which is the case in the current market, an oversold one.

I noticed that about 81 stocks on my radar screen had formed small double bottoms and had broken above their respective db necklines. Some of these breakouts are supported by heavy volumes, especially for some China plays. What does this mean? Seems the market is mature for a relief rally or a sucker rally as mentioned in the market comment in this blog a few days ago.

China plays may lead this rebound until shorter term averages converge with the longer term averages, resistance of this rally. Most stocks may have abilities to rebound about 50% of total fall from high. Remember to take this excellent opportunity to exit long positions since the bear has been in this market for a while already. Bear in mind that this is just a rebound, market will fall again after this rally.

To participate this rebound, may focus on following counters, buy or add positions near necklines of DBs, sell after rebounding about 50% of total fall, this principle applies to existing positions also,

China Essence db .455 -.505
China Milk db .83-.92
Fabchem db.38-.41
Luzhou db .49-.59
FerroChina db .55-.61
Mediaring
China Dairy db .465-.51
China Paper tb nl .325
China Precision db .265-.32
Midas
ChinaPetro db .43-.50
Ezyhealth
XPress db .125-.14
Longcheer
Pac Andes db .635-.70
Link Hi db .15-?
HengXin db .32-.37
JiuTian db .395-.465
SkyChina db .295-.325