Will the Year of the Dog bring good fortune to AIM?
The AIM Market (FTSE:AXX)
As we enter the Chinese Year of the Dog, one (we suspect like every Chinese year) which will be blessed with luck and good fortune, a look at the AIM (AXX) market appeared a good idea. Unfortunately, there's quite a lot not to like about AIM at present.
It's probably worth mentioning though, that while the FTSE (UKX) appears to be on a path towards 6,800 points, the last six sessions have failed to actually depress the market. Similar behaviour is playing out on the AIM market. The immediate situation with the AIM is, similar to the FTSE, a little weird though thankfully presenting a more logical picture - a sentence we never expected write about the AIM.
Currently trading around 1,016 points, the AIM index only need better 1,021 to point at coming miracle recovery toward an initial 1,032 points. Moreover, if such a level is bettered, the index calculates at 1,060 and suggests a coming challenge against the downtrend which dates back to the year 2000!
This is liable to be quite a big deal.
Once the AIM market actually trades above this downtrend, we're now showing an initial 1,134 point ambition with secondary a longer term 1,555. In this territory, it implies some life changing potentials against many AIM constituents.
Now for the however.
Just as the AIM market does not actually require much effort to imply growth, equally it need only weaken below red at 1,005 points to stray into a zone where a drip down to 950 looks very possible.
Secondary, if/when broken, calculates at 903 points. Broadly speaking, a visit to the 950 level will equate with the FTSE smacking itself down to the 6,800 level. Perhaps more importantly, while neither drop potential is particularly game changing, the visual implication is of the market simply slowing itself down rather than "doing a BMR". The AIM market requires below the dashed red line, currently 735, to imply purchasing running shoes rather than AIM shares would be a good idea.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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