STOCKWATCH: Rebound unsupported by turnover; choppy days ahead

The plunge of the market in the earlier session yesterday was largely due to the profit warning issued by Yahoo. Concern that US stocks might again decline on further profit warnings and the disappointment brought by the unsurprising new Annual Budget kept the HSI entangled in the low zone even though some stability was gained towards closing. All technical indicators such as MACD and RSI may have pointed to a halt fall symptom, the market has nevertheless been on the weak side and turnover withering day after day, indicating prevalence of caution. The phenomenon is not expected to see any drastic turn without new stimulation. Any rise of the HSI should therefore be viewed as mere technical rebound and over-chasing should be avoided. With no further negative news, there may be some continual tremour, but a huge down-range will most probably be unlikely. Investors are fixing their attention at the moment on the impact on Fed rate-cuts posed by the US Employment Index to be released tonight. Some churning is expected today between 13900 and 14400.

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