Wednesday, August 13, 2008

Dead cat bounce?

As expected, the MSM index rebounded somewhat yesterday, up about 3.5%.

Those with a penchant for risk and opportunity should keep a weather eye out for the next few days. I'd expect to see a further drop as short term profits are taken, and that should be a buying opportunity for quality stocks that get caught up in the low liquidity and general panic: EG:
Bank Muscat, Galfar, Renaissance. (one could add Omantel, given the expectation of the long awaited strategic partner, but they are such a badly run and incompetent Government monopoly I wouldn't touch them with a 10 foot pole).

However, given the volatility lately, you need a good broker, or you'll find out you paid the highest price during the day.

But no matter what, the market will be interesting to watch for the next few days...

Oh, for those unfamiliar with the term Dead Cat Bounce used in the title: it comes from the phrase 'even a dead cat will bounce if you drop it from a great height': Thus, its a common observation of markets that following a big drop, there is often a slight rise immediately afterwards, but this does not mean prices will recover - its a slight blip on a downward trend.

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