WSE - on the way down
A downward trend on the Warsaw Stock Exchange has started, which will force the indexes to new lows. While the WIG and the TechWIG indexes have exceeded their December highs, the WIG20 has not, and this divergence, in itself, is a strong bearish indicator.
Although there may be one more attempt at a rally, which is a possibility, such efforts are destined to fail, and once the 40-, 20- and 10-week cycles line up and point southwards, all the main indexes will enter a trend of new lows, the first of which should be achieved during April.
Should the US invade Iraq and secure a quick victory before this time, there will be an immediate relief rally in celebration, but it will be yet another "bear market rally" in the overall secular bear market trend. Once the celebration is over, then more attention will be paid to the economic problems endemic in the US and Europe.
Any attempts to support the market will merely defer the inevitable. The target price for the WIG20 should be no more than 802.74 before the full correction is completed.
Although there may be one more attempt at a rally, which is a possibility, such efforts are destined to fail, and once the 40-, 20- and 10-week cycles line up and point southwards, all the main indexes will enter a trend of new lows, the first of which should be achieved during April.
Should the US invade Iraq and secure a quick victory before this time, there will be an immediate relief rally in celebration, but it will be yet another "bear market rally" in the overall secular bear market trend. Once the celebration is over, then more attention will be paid to the economic problems endemic in the US and Europe.
Any attempts to support the market will merely defer the inevitable. The target price for the WIG20 should be no more than 802.74 before the full correction is completed.
