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Saudi: did you follow the signs?

Posted: 11/26/2012 - 10:59 am

On November 20, we said that there was no justification to rush into buying the Saudi market. Our view was that a stabilization in price was required and that the testing of the upper-end of the 6500-6650 support zone was not enough to enter the market (read: Saudi: testing our target support zone).

The TASI has continued its sharp fall since then losing an additional 2.1%. The move puts the index near the low-end of the highlighted support range.

Traders/investors who followed our advice by staying on the sidelines were able to protect themselves against some potentially heavy losses and yet again, they are faced with the decision of whether or not to buy into the latest sell-off.

As we said in our last note and we reiterate in this one, having the TASI test the support is not enough reason to buy. Traders/investors should be looking for stabilization in the price action or a clear sign of renewed buying interest. Until then, our recommendation remains unchanged and traders will be advised to generally stay out of the market.

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