BSC_Weekly report 24.01-30.01.2015_The market can get more stable in the next week_DPM Update

On the last day before the Circular No.36 takes effect, some Securities companies have informed about their margin changes and this event has sparked fears of disruption in the short-term cash flows. However, low volume today showed the activity of margin cutting, if any, was not so strong. We believe "weak investor’s sentiment" is the biggest factor affecting the market in this period. Beside rumors appeared in the middle of the week, the market too long sideway performance without clear breaks (only big baking stock rally but the bull has not spread out to other groups) has made investors sentiment quite frustrated and become impatient. The "failure" of 580 pts threshold can significantly affect the market trend. However, we believe the market can get more stable in the next week. Technically, the temporary supported will be around 570-575pts while new resistance will be at 580 pts.

Recommendations

Investors should consider reducing the stock proportion.