After suffering a huge fall since the beginning of the latest hostilities with Lebanon last Thursday, the TA-25 bounced back in afternoon trade Sunday. The index had lost nearly 100 points in three days, or around 12 percent of its value, touching a ten-month low of 718.6 Sunday morning before stabilizing around 730 midday and suddenly spiking nearly 40 points, or 6%, in two hours, before ending the day up 3.2% at 772.
The surge, however, did not appear directly connected to any positive news, but rather was more likely a case of a "bear squeeze," which occurs when a declining stock/index starts to stabilize at a certain level (in this case 730) and those who were previously "short" decide to buy back their positions to capitalize on their gains. The sharp rate of ascent that occurred Sunday seems to indicate there was a scramble to cover short positions rather than more sedate purchasing of the market by new investors.
Therefor, the outlook for the market over the coming sessions is no different from where it stood at the start of trade Sunday - namely that trade will likely be dependent on individual news items coming out of the conflict. And, since one swallow does not make a summer, the short squeeze seen Sunday afternoon is unlikely to spell the end of the malaise that has been hanging over the TA-25.
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