The in­dus­trial ma­chine

Finweek English Edition - - INVESTMENT - SI­MON BROWN

WE’VE GIVEN two buys on this in­dex: back in May when it was around 43 000 and again in July at around 45 000, and with the in­dex now over 51 000 both th­ese sig­nals have done very well in a rel­a­tively short space of time, but now what?

The cry from fund man­agers is that the mar­ket is ex­pen­sive (I agree on this) and that a pull­back is cer­tain (I also agree on this). But here’s the thing, when will we see this pull­back and how sig­nif­i­cant will it be? Fund man­agers have been call­ing for a pull­back for pretty much the en­tire year and we did see some weak­ness around June, but this was seem­ingly not enough for those un­able to find any­thing to buy.

I am per­son­ally long this in­dex and will re­main long for now. I’ll keep an eye on 46 360 for the exit level (and this level will be mov­ing higher as the in­dex moves). So for now I con­tinue to hold and a pull­back may not even breach my sell level.

* The writer holds STXIND.

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