In the course of Monday’s trading session, global investors were able to recover from the effects of strong emotions; by the end of the day, they won back the morning’s decline. The Ukrainian stock market, in its best traditions, decided to stay on the sidelines and won back only a minor part of losses from the first hours of trading. Thus, our assumption that the UX Index decline should be used to gradually close short positions (while not rushing to open long positions) is justified.
The next important step in decision-making is the answer to the question of the nature of markets’ reversal. If we are dealing only with eliminating the conditions of being oversold (i.e. directly on the rebound), then the growth of the UX Index should be used to open new short positions. If not, then uncertain stock dynamics should be used to open long positions. From our point of view, the answer to this question in the forthcoming trading sessions should be problematic, and market players would be well advised to wait until consolidation levels are completely formed.
