Wait for a reversal signal –  patience pays

The Nifty ended in deep red near its important support level on Wednesday as weak cues from global markets and the depreciating rupee weighed on sentiment.
The Nifty has been moving downward for more than a year. The downtrend reversed in January this year when the index rallied smartly from 4,530 to 5,630 in a span of just two months.
“At current levels, chart patterns looks extremely bearish and one needs to remember that bottoms are formed in such gloomy situations. “However, at this stage there is no such indication of a bottom being formed but, indices remaining in a range for few days at these levels could make case of some early signals of a bottom formation. From a trader’s perspective,  the view is that the stage is set up for a bounce bank if the Nifty sustains above 4,960 levels and the Sensex above 16,400.

Based on long term charts 4750 to 4800 remains very strong support and Nifty is unlikely to fall below this in absence of any further negative news flows.

Bank nifty has seen low of 9000 and momentum traders need to watch 9500 levels very closely as a move above this will be very clear indication of  a positive trend building up. There can be very frenzied squaring of short position seen once Bank Nifty sustains the above mentioned levels. In this depressed period,  systematic trades with a very strict stop loss should only be initiated however, medium to long term investment can be initiated on dips on a regular intervals in small parts. Looking from a long term perspective If it is about risk-reward, I think this zone provides a favourable risk reward ratio.

……ALL FALL DOWN

We have witnessed an extremely topsy-turvy first 6 months of year 2012. First two months the markets saw a stupendous rally mitigating for the losses of full year 2011. March was eagerly awaited due to Budget and the crucial RBI policy, however, after that the months which followed have seen a sideways action for the markets, and off late we are seeing the markets, especially the stocks rather than the indices crumbling.

Technically, the markets have undergone severe damage leading to a sea-change in the outlook going ahead. The benchmark indices have closed below their crucial 200 DMA levels, as well as breached the key retracements levels of 61.8%. Interestingly, the stocks which called the shot few months back, are struggling to find any sort of support in this market.

But as we know, history is history, what is more important is the current scenario and the outlook going ahead. Jumping to the last few weeks of trading, I think one very important factor which is developing, is the fall of all asset classes across the board. Take global equity indices, US or European, or Crude Oil, Gold / Silver, etc., all of these are witnessing a sharp correction. I think, this is a clear case of risk aversion happening across the global investors, which is leaving a deep impact on the equity markets especially.

With Oil correcting by more than 10%, it provides a favourable backdrop for RBI to cut rates. If rate cuts ensue in the next few policy meetings, markets could provide the much necessary boost.

QE3, seems to be now the talk of the Wall Street, with June meeting eyed for any chance by the Fed to inject liquidity into the system.

If it is about risk-reward, I think this zone provides a favourable risk reward ratio to investors, looking from a long term perspective.

Trading has been on lacklustre in the last few weeks, however once the markets stabilises and volatility subsides, a short term reversal can most likely happen.

As of immediate short term, it is a wait and watch, however, I believe one should look at stock specific opportunities to start building a robust portfolio for rough times ahead.

Trade with strict stop losses, and more important is trade light.

In such times, I believe one should adopt a strategy of “ Live today, so that you can make a killing tomorrow”. This means, trade light in this market, and once a favourable trend begins one can start investing in good volumes.

April – A mixed bag in Motown

The month of April witnessed weakness in auto sales for companies like Maruti and Tata Motors, while 2 wheelers like Hero and Bajaj reported good sets of numbers. M&M put up a good show on the auto side, on the new launch of XUV 500. Rise in fuel prices and excise duty hikes on national as well as state levels led to hampering of sentiments, while interest rate cut of 50 bps had some positive impact. CV sales were the most affected during the month as macros posted weak set of numbers (IIP). ON the PV side, we believe the first half of the year will be slightly tepid, while any further cut in interest rates, new model launches and diesel engine capacity ramp up will help the auto industry to grow mainly in the second half of the year. Strong two wheeler sales of the two market leaders was a big surprise as the street expected weakening of rural growth to impact two wheeler sales negatively. The growth in 2wheeler sales indicates resilience on their part.

Hero Motocorp – (Under review)- Surprised one and all

Hero posted a growth of 4% mom and 7% yoy in April at 5.51 lakh units. This was above our expectations as April is generally a weak month when compared sequentially defying any slowdown or sluggishness in the domestic two wheeler industry. However, competition from Honda, new launches from Bajaj and slowdown in the rural markets remain overhang on the stock. Still among 2 wheelers, we prefer Hero over its peers due to its market leadership position, strong presence in the executive segment, widespread dealership network and array of strong products.

Bajaj Auto (TP – Rs 1,620, Neutral)- Weakness ahead

Bajaj posted 4% yoy growth in April which seems not too impressive, however it grew by 14% on mom basis which is a good start for a new year. Motorcycles grew by 6% yoy while 3 wheelers de-grew by 13% yoy. Export growth was at 7% Exports of the company jumped to 44% of sales as compared to 34% in March. Going forward, we believe that the company will continue to face increased competition from Hero and Honda in the domestic markets and new launches within the Discover and Pulsar range may cannibalize its existing portfolio. On the export side, Sri Lanka (20% of exports) increasing import duties on 2W and 3W and Indonesian auto manufacturers projecting de-growth for FY 13 may impact Bajaj Auto’s performance. However, management guided for a 6% growth in Q1 FY13 and to sell more than 3 lakh motorcycles per month this year. They also expect to grow at market growth rate this year.

Mahindra and Mahindra – (TP- Rs783, BUY) – Auto segment strong, FES segment subdued…

M&M sold 40,719 units in the auto segment, a 27% growth yoy which was a good number for M&M. Passenger UV sales in the month grew by 33% yoy to 20,558 units, which was a slight decline mom. The yoy sales growth came on the back of the new launch of XUV500. 4W pick-up segment which includes Gio, Genio and Maxximo posted a robust 37% growth yoy as the LCV segment continued to grow at a strong pace indicating expansion in the total sub 1 tonne LCV market. Export declined significantly to 1,420 units. Farm Equipment Segment (FES) which had posted a very robust growth of 71% in October almost halved in November, and moved down even further to 15,315 units in December and continued to go down with a negative growth of 6% yoy in January. This negativity went further deep in February, as M&M reported 20% dip in this month on issues of increasing delinquencies on the agri credit, slowdown of farm yields and overall tepid growth in Indian economy. However, March showed some revival in tractor sales on a mom basis, as they sold 17,405 units, almost a 15% growth mom. In April, again the segment showed slight weakness as sales fell by 8% mom and 13% yoy.

Maruti Suzuki – (TP – Rs 1,300, Underperformer)- Performance lower than expected

Maruti Suzuki (Maruti)‘s sales in this month came at 100,415 units as compared to 97,155  units, 3.4% growth on yoy basis. In a scenario where petrol prices are moving up, the bread and butter segment, the mini segment of Maruti comprising Alto, Wagon R and A Star de-grew by 26.4% yoy. The compact segment comprising Swift, Ritz and Estilo showed a solid growth of 43% as demand for diesel cars is moving northwards on the backdrop of gap between petrol and diesel prices increasing and the production of high demand new Swift getting back to normalcy of >17,000 units per month.  Vans segment de-grew by 10% yoy as vehicles such as Omni and Eeco underperformed. In the SUV segment, the launch of Ertiga led to s strong growth to 5,593 units v/s 217 units yoy. Dzire model grew by 31.5% as the new diesel model consistently performed. SX4 model declined heavily by about 70% yoy as there was dearth of diesel engines. Exports grew by just 1.5% yoy, while de-growing by 32% mom to sell 10,160 units. Any further rate cut by the central bank of India may have a positive impact on the volumes, while petrol price hike will impact sales adversely. State level levy of extra excise duty on cars will impact sales in those states in coming months(eg:- Maharashtra). Restriction on the expansion of diesel engine capacities lead to a cap on the diesel engine sales going forward. Also yen appreciation and fuel price hike along with doling out of higher discounts on petrol cars will be impacting the stock negatively.

Tata Motors – (TP- Rs318, BUY)- Negative surprise

April sales for the company were lower by 7% yoy, while on mom basis, they fell by a huge 40%. CV sales dropped by 6% yoy, out of which LCV sales were up by 9% yoy signifying LCV segment’s defiance of the macro uncertainties. New launches like the variant of Ace Zip led to the growth in LCV. MHCV sales however slipped by 29% yoy as macro weaknesses surfaced in the month. PV segment sales fell by 7% yoy which was arrested upto some extent due to Indica range which was up 63% yoy on new launch of Indica Vista launched a quarter back. Utility segment sales went up by 5% yoy. Indigo range sales were down by 31%. Nano sales declined to 8,028 units which was a decline of 20%. Although the domestic business has underperformed this month, on a broad basis, it has performed well in the past and the contribution of domestic business to the total profits is just 20%, which leads us to maintain BUY on Tata Motors as JLR business is outperforming.              

TVS Motor – (TP- Rs 50, Neutral)- In line with expectations

TVS sold 1.74 lakh units in April in line with our subdued estimate. This was a de-growth of 4% mom and a growth of 4% yoy. Motorcycles de-grew by 4% yoy, while scooters grew by 2% yoy. 3 Wheelers have continued their underperformance as they declined 19% yoy to 2,961 units. In FY 13, TVS expects  to grow at 8-10% against 7.9% in FY 12. With rising competition in the scooter segment from Honda, M&M and Suzuki, slowdown in motorcycle segment and structural weakness in 3 Wheeler segment , we continue to believe that TVS will be a laggard in the 2W segment.

4-Wheelers marching ahead in March…

The month of March witnessed an expected surge in auto volumes as pre budget buying was prevailing in the first half of the month and since there was no negative news for diesel cars except the expected hike of 2% in the excise duty across the board, the cheer continued in the second half as well. Seasonally a strong month – March saw companies like Tata Motors, Maruti and M&M (our top picks in that order) post all time high monthly sales numbers with each of their segments performing well. With Tata Motors touching the magic figure of 1 lakh, Maruti crossing its pre strike volume number and M&M with its new launches helping them to put up a record high in UV sales the auto industry saw a firm uptick. On the other hand, TVS continued its disappointment, signaling that Honda is taking its toll on their performance . Each of their segments saw a sharp fall in growth- thus showing fundamental weakness. TVS’s peers also posted a subdued show, however better than TVS. 2 wheeler companies have given a word of caution stating that they are still in a slowdown mode and there is nothing motivating to predict a bullish overtone to the 2 wheeler space in the coming year as of yet.

Ashok Leyland (TP – Rs30, Neutral)

Ashok Leyland’s March sales exceeded our expectations, as they sold 14,285 units, a growth of 17% yoy. This constituted the newly launched LCV Dost which sold 2,211 units, while the actual MHCV volumes declined by 0.8% yoy to 12,074 units. However, MHCV sales grew by 27% mom and LCV sales grew by 40% mom. The total sales surpassed Ashok Leyland’s full year target of 1 lakh units. In FY 12, the company grew at a pace of 8.4%. The company sold 94,416 MHCVs and 7,593 LCVs in FY12. Improvement in South Indian markets will remain a key to success in FY13.

Bajaj Auto (TP – Rs 1,620, Neutral)

Bajaj posted just 9% yoy growth in March and a 4% dip on mom basis. Motorcycles grew by 10% yoy while 3 wheelers grew by 4% yoy. Despite March being a strong month for auto industry, Bajaj like its peers posted a soft performance, below our expectations. In FY 12, the growth was 14%, while the company estimates to grow at 15% in FY 13, which we believe is a bit too optimistic considering the difficult operating environment in the midst of a slowdown. Exports of the company will also feel the heat with Sri Lanka (20% of exports) increasing import duties.

Hero Motocorp (TP- Rs 2,000, Neutral)

Hero posted a flattish growth in March at 5.28 lakh units, while on a yoy basis it was a growth of just 2%. The subdued performance of two wheelers signifies slowdown and sluggishness in the domestic two wheeler industry. However, competition from Honda may eat up the market share of TVS ( which has already started to happen), followed by Bajaj and then compete with Hero as the gap between the scale of Hero and Honda is very wide. Hence, we believe that within 2 wheelers, Hero is one of the stocks to look at.

Mahindra and Mahindra – (TP- Rs783, BUY) – Auto segment sails through, FES segment recovers…

M&M sold 47,001 units in the auto segment, a 25% growth yoy which was a stellar figure for M&M, a record high. This performance was better than our expectations. Passenger UV sales in the month grew by 30% yoy to 21,257 units, which was 14% growth mom. The strong sales on the recently launched XUV 500 and the new Xylo led to this strong growth. 4W pick-up segment which includes Gio, Genio and Maxximo posted a robust 28% growth yoy as the LCV segment continued to grow at a strong pace indicating expansion in the total sub 1 tonne LCV market. Verito sales were strong in the month at 1,763 units up a mammoth 73% yoy v/s 1,619 units in February. Export sales moved up by 31% yoy  to 2,659 units, however, this was flattish mom. Farm Equipment Segment (FES) which had posted a very robust growth of 71% in October almost halved in November, and moved down even further to 15,315 units in December and continued to go down with a negative growth of 6% yoy in January. This negativity went further deep in February, as M&M reported 20% dip in this month on issues of increasing delinquencies on the agri credit, slowdown of farm yields and overall tepid growth in Indian economy. However, March showed some revival in tractor sales on a mom basis, as they sold 17,405 units, almost a 15% growth mom. However, yoy they declined by 12%.  In FY 12, the company’s auto sales grew by 28%, while FES ended the year with just 10%, v/s 17-18% projected growth by management in October.

Maruti Suzuki – (TP – Rs 1,475, BUY)- Performance in line with expectations.

Maruti Suzuki (Maruti)‘s sales in this month came at 125,952 units as compared to 121,952  units, 3.3% growth on yoy basis, while on mom basis it was up by 6%. In a scenario where petrol prices are moving up, the bread and butter segment, the mini segment of Maruti comprising Alto, Wagon R and A Star de-grew by 10% yoy. The compact segment comprising Swift, Ritz and Estilo showed a solid growth of 23.6% as demand for diesel cars is moving northwards on the backdrop of gap between petrol and diesel prices increasing and the production of high demand new Swift getting back to normalcy of >17,000 units per month.  Vans segment grew by 146% yoy as the pre-launch dispatches of Ertiga started in March itself. Only the SX4 model faced a huge decline of about 58.1% yoy as there was dearth of diesel engines. Exports grew by 14.7% yoy, while growing at 17% mom to sell 13,228 units with non European geographies like Asia-Pacific, CIS countries and Africa showing growth momentum . In line with the new Dzire model launched in February, it has started creating a base of 15000-16000 units per month as it grew 60% yoy to 16,541 units in March. Any rate cut by the central bank of India may have a positive impact on the volumes, while petrol price hike will impact sales adversely. Status quo maintained on diesel cars taxation is a good news for Maruti and the cheer is expected to continue in coming months though 2% excise duty hike getting passed on have made cars costlier. State level levy of extra excise duty on cars will impact sales in those states in coming months(eg:- Maharashtra). Expansion of diesel engine capacities will help the company to cater to the bludgeoning demand for diesel cars. In FY 12, Maruti’s sales de-grew by 10.8% on competition, fuel price hikes, interest rate increase and strikes at the Manesar plant.

Tata Motors – (TP- Rs318, BUY)- Record high!

March sales for the company were at a record high of 100,414 units, 20.5% up yoy and 9% up mom. CV sales grew by a healthy 16.7% yoy, out of which LCV sales were up by a healthy 37% yoy signifying LCV segment’s defiance of the macro uncertainties. New launches like the variant of Ace Zip led to the growth in LCV. MHCV sales however slipped by 5.8% yoy while growing by 13.7% mom. PV segment sales have started to pick up since last quarter as they grew by 33.6% yoy on strength coming from Indica range which was up 64.6% yoy mainly on prebuying effect of budget and on new launch of Indica Vista launched a quarter back. Utility segment sales went up by 40.5% yoy. Indigo range sales were also up by 15% after underperforming in February. Nano sales were the star performer as they grew smartly up at 10,475 units, 20.3% up yoy and 13.6% mom. Continued strength in CV business aided by LCVs and robust PV sales have led to a continuous solid growth in volumes of the company. Total FY 12 growth of the company has been 13.3%.              

TVS Motor – (TP- Rs 50, Neutral)- Seasonally up… though the broad picture remains negative

TVS sold 1.83 lakh units in March in line with our subdued estimate. This was a de-growth of 4% yoy and a growth of 6% mom. Motorcycles de-grew by 17% yoy, while scooters fell by 7.6% yoy. However, the low cost mopeds performed well by growing 16% yoy. 3 Wheelers have continued their underperformance as they declined 33% yoy and 26.5% mom. In FY 12, TVS sales grew by just 7.9%. With rising competition in the scooter segment from Honda, M&M and Suzuki, slowdown in motorcycle segment and structural weakness in 3 Wheeler segment , we continue to believe that TVS will be a laggard in the 2W segment.

Blockbuster Start to 2012

The start of 2012 has been a thrilling experience for anyone who is into stock markets. It’s been a stupendous rise for some of the major stocks and indices are clocking gains as I write this piece of article.

What needs to be seen now is whether the rally has gathered enough momentum to sustain the same, in short whether it is a steroid providing a short term boost or a proper medication. It’s not how effective a medicine works at the first instance, it is how far can the medicine last and what would be the repercussions of the same is something which needs to be watched with bated breath.

FII’s have made a strong comeback into our markets. Till date since the onset of 2012, they have pumped in 25000 cr(approx), and let alone in the month of Feb they have pumped in 14000 cr (according the the actual numbers from SEBI). We have already seen, some of the stocks making a brilliant comeback and rallying more than 50% of their price since the last 5-7 weeks. The European problems and its issues are being sidelined by the markets, and we can now say that they are forward looking, especially with the painful Q3FY12 period for most of the local companies getting a relief.

I believe that the undertone of this strong rally has purely been the turnaround of the interest rate cycle. RBI cutting the key interest rates and signalling that inflation cooling further will give them a leeway to relax the steep rise in interest rates and Infact go for a cut in the same. The banking sector which comprises a major proportion of our stock market capitalisation will heave a sigh of relief with this reversal of interest rate cycle. This will in turn have a trickling down effect to rate sensitive sectors such as Real Estate, Auto stocks, Capital Goods etc.

Technically one of the best part of this “relief rally” has been that we have comfortably crossed the 200 DMA, and have managed to sustain that since the start of Feb 2012. This is an extremely positive sign for the outlook going forward. Some stocks have touched their 52 weeks high and some of them have rallied to lifetime highs in this rally. It is a good sign, but what is now important is when the markets would go into the consolidation phase the kind of correction in the stocks which we will witness then, would determine the sustenance of this rally going forward.

It is true that stocks would always provide a higher percentage returns vis a vis the index, but it is the index which will show the actual “direction of the trend”.

Markets have proved it yet again that “ To break extreme pessimism, you need extreme optimism.”

Nifty may face resistance around 5,150-5,265 range in the coming week

 A year ago, month of September was an excellent month for trading in the Indian markets. The Sensex and the 50-share Nifty index were in touching their all time highs. Indian markets registered double digit gains, making it one of the solid months of 2010.

Exactly a year later, in September 2011, Indian markets are struggling to find their base, and the amount of pessimism at these levels is way too high.

The last week, was a very short one (in terms of the number of trading days), however the markets registered some excellent bounce, making it a 3 on 3 for the week. The bounce was much anticipated and much needed for the markets, looking at the kind of battering the stocks had faced for the couple of weeks before.

Talking about the sectoral performances, two sectors which have witnessed strong price action in this leg of rally were the metals and realty sectors. If we take a close look at the statistics below it will show the amount of short covering witnessed in these two sectors.

The laggards, however, have been the defensive space, FMCG, CG and CD. However, concerns still remain on the underperformance of banking and auto stocks.

The comparison below is for all BSE sectors with respect to the Nifty (except on WTD basis).

Technically, the markets took strong support from 4,750 levels on Nifty and are now well above the 5,000 mark, making it a sharp 6%+ bounce.

The resistances for the markets are placed at 5,150-5,265 levels for the coming week. However looking at the kind of activity stocks are exhibiting, I believe that the markets can sustain this bounce as well.

Also, the sentiment is filled with pessimism, hence the chances of markets taking out the resistance is very high. However, the only strain could come from weakness in the global markets, or any new events unfolding in the coming week or month.

Markets have historically seen a volatile month of September. For starters, from 2003-2010, we had only one year of 2008 where Nifty gave negative returns. Barring that in the other 7 occasions, the market has closed in positive.

Even if history does not repeat itself, let’s hope it does rhyme!!

How long can the markets consolidate, or stay in a range?. This is one question which lingers on to the minds of all investors and traders in the current scenario.

Last week’s price action can be termed as a mixed reaction for our markets. The first three trading sessions of the week seem to suggested lacklustre movements in our markets. However the last two sessions were the game-changer. The reason we believe that is because, on Thursday the markets ended lower breaking the key support of 5550 and the sentiment at the end of Thursday was heavily bearish, however on Friday it was a complete turnaround for our markets. Nifty broke the key levels of 5600 and was in touching distance of breaking the 5650 mark at one point of time. We believe that such swift turnarounds in markets, especially with the kind of lacklustre weeks of trading, is good, as now any further positive momentum can result in more short covering coming across a lot of stocks.

There are two critical aspects technically, which is worth noting in the last 2-3 weeks of price action:

1. The rally in the second half of June from 5250 to 5750 levels. The retracement levels of 50% was exactly at 5495 (which apparently was the low on 12th July). The markets have thereafter not looked back at the support and have held on to it.

2. The next key aspect is the confluence of short term moving averages around the 5500-5550 mark. The zone was very critical from the technical point of view and a sustained close below this range could have triggered a next round of selling in the major indices.

Next week is an action packed week for our markets, as there is the RBI policy meet and also the expiry week for July contracts. We believe that the action would be more on the bullish side, as the global indices (especially Dow) look quite attractive on charts. Also we believe that the frontline stocks, which had a subdued last couple of weeks, will once again witness some strong price action. Short covering will also be witnessed in many of the oversold counters once the markets stable above 5650 levels.

Food for Thought: Since 2003 our markets have always had a positive close, with an average gain of 4.8% and a minimum gain of 0.5%.
THAT IS 7 YEARS OF POSITIVE CLOSING….!!!!

In my last blog on 13 May 2011, it was clearly mentioned that markets staying below 5500 could see levels of 5400 which is a very strong support. May expiry started at level of 5750 & now stands at almost 7% down in this expiry. In the current expiry, banking stocks have been worst hit and from the frontline stocks, SBI is the biggest loser down by almost 25%.

From the first week of May, as previously mentioned by me that indices can go up to 18000 / 5400 after it breaches the level of 5700 / 19000. Since last few days markets have started trading below 5400 levels. Outlook based on the charts seems bearish as long as it stays below 5400 and further, the situation will become more bearish if it does not sustain above 5350. Short term oscillators are showing some signs of optimism but it needs support based on the key levels.

If indices manage a bounce back & later sustain above 5460 there is a strong possibility of resumption of uptrend. Tomorrow being the first day of June’s Future Option series, it needs to be monitored very closely for any early indication of change of trend.

CEMENT MONTHLY –February 2011

Industry as a whole has performed better in the month of February v/s previous month. ACC, Jaiprakash Associate & Dalmia Cement dispatches grew by 17%, 36% & 20%  YoY respectively mainly on account of capacity expansion. However, most of the other cement companies reported a YoY sales growth of 3.5% to 5%.

The recent change in the tax structure from 10% excise duty to 10% ad valoreum duty as well as 30% hike in the coal prices by coal India negatively affected the sector. In response to this, cement companies hiked cement prices by Rs.6-10/ 50 kg bag across regions. In lieu of rising raw material cost, cement industry has already raised the prices by Rs. 25- 40 for a 50-kg-bag in the last two months. As the industry has learnt to maintain price discipline, we do not expect prices to soften for the coming few months. We expect a better cement demand in FY12E v/s the current year mainly due to increased infra spending by the GoI. We retain our POSITIVE stance on the sector. We have NEUTRAL rating for ACC , BUY on Heidelberg Cement & SELL on Shree Cement.

From the desk of AMI SHAH

It was mentioned that downward pressure will increase once the markets break the 5380 level, evidently this happened at a rapid speed owing to the last day of expiry & global worries. Now we are at the threshold of retesting the bottom formed 2 weeks ago.

There is possibility of this occurrence in next two days except that a bearish move has already begun and it would be important to watch for signs of strength and the regaining lost ground. For regaining strength, the market needs to bounce back above the 5400 levels and if not, we may see indices breaking the lows made on 11-Feb 2011 and fall further, in that case the nearest support seen from current levels is at 17200/5100.

Based on the technical charts 500EMA is currently placed at 5150 as well as based on the long term weekly formation of a support trend line  that is placed around this levels.  As a result, we could see panic if this levels are broken. After the announcement of budget indices at the very least need to  cross & sustain above 5430/18000 which can pull the bulls back into action otherwise the downward trend will continue.