Reached a bottom?

Reached a bottom? Thursday, January 24, 2008

Posted by ei-forum in Investing.
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Despite the fact that investors should still be very cautious, some analysts and so called ‘experts’ are starting to call a bottom. The main reason behind this is that the huge drop we experienced yesterday was followed by a big rally during the same session and this is considered a ‘text-book’ bottom pattern.

Furthermore, Europe seems to be rallying despite very serious concerns for the banking sector (especially the SocGen scandal) and the suspicion that the economy still has to catch up to the US down-turn.

Could this simply be short covering mixed with investors trying to book some profits/save losses in preparation for next week?

As you know, we are not in the business of calling the market but we do feel that it might be time to add a second third to our previous positions in Precision Drilling Trust (link), Safety Insurance Group (link) and Citigroup (link).

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