An example of market Euphoria

During the early days of my pursue of knowledge in the field of Technical analysis, my teacher ever told me of the 3 phases of movement.

When a chart starts to move, it begins with gradual 20-30 degree climb. This would be relatively dull and boring. As interests on the counter grow, its angle of assencion change to 45 degree. This is where demand equal supply. There is however a time when the climb turn steep to an angle of 60 degree. This is what he told me as market euphoria. It is at this point when people do not care, they will never think any alternative will be possible.

Sadly this is also the point where the bubble will burst any time. It will end with a sectacular display of fire works, huge volume with huge move. Before you know it, the chart will quickly descend.


Fig 1 Genting Daily Chart

Here, I am witnessing a market euphoria at work, people continues to predict how much higher it is going without the consideration of market reversal. The indicators are that the peak and have once defied a possibility of divergence. If this counter continues to go up, how far will it be going? Base on Fibonacci projection that I have placed in, target would be somewhere at 2.34.

But then I won't really dare to go in this one, it will be too late to do so anyway and it is not safe.