Unexplained largish movements
Is it my imagination or are the number of companies that have a largish down movement only to bounce back later increasing ?
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Answer
Hi Kevin,
We think you may be right although it’s not the easiest metric to measure. However, a couple of market factors could support your observation/ “Gut Feel”:
- Passive fund flows can have a big influence on stocks that are big constituents in a particular index – we see this in the Uranium and Gold sectors specifically.
- Further, the market is trading around its all-time high with a number of top performing names trading on historically high valuations.
- Investors could be looking for some “low risk” bargains into weakness while it’s hard to see CBA much above $175 and JB Hi-Fi we think will struggle above $100 i.e. a little switching could be unfolding as elastic bands stretch ever tighter.
