Dow Jones has met with bulls and bears fighting with indecision for the past one week. Resistance level of 14,450 – 14,500 still holds and it has demostrated how nicely the candles stick to the levels verifying the resistance zone which was first predicted on 8 Mar 13 in my earlier postings. The CCI is coming down and MACD has crossed finally (lagging). In view of the tough fight between the bulls and bears, we need to wait for candles that shows distinctly whether it breaks out of resistance zone or retrace below it.
Hang Seng was performing badly. As forcasted last week, it has broken down its previous support and is currently at its next support of 22,185. These two supports were pinpointed accurately. I foresee further downside for HSI in the coming week.
STI is still consolidating sideways and has been so for the past few weeks. It is bounded by resistance of 3,320 and support of 3,230. Bearish divergance still maintained and its direction will only be known when it either breaks the resistance of 3,320 or support of 3,230.
STI is still consolidating. Edging up with lesser strength. My earlier comments on STI is still unchanged. Due to high spirit in DJ, STI was lifted up on Wed and Thurs. However, it lacked strength on Friday 8 Mar and resulted in a red candle.
Sometimes I wonder how come bad news coincide with technical reversal. Today STI actually gap down and broke its short term support. I am looking at next support at 3,160-3,170. For those who haven’t seen my earlier posting, please take a look at the posting of STI 22 Feb 13 (weekly/ daily) on my analysis of STI in near term. Let’s wait to see if STI gets supported at 3,160 – 3,170. I would also expect evening star candlestick pattern to form at the end of the week in the weekly chart.
The week ended with STI further consolidate and close at 3,288 on 22 Feb 12. Though still bullish, the index is losing momemtum as it approaches the resistance at channel ceiling and the weekly resstance of 3,319. Daily indicators also showing momentum slowing down with CCI turning negative and appearance of MACD bearish divergence. Weekly chart DOji appeared, signally the possibility of a reversal. Investors should watch out for profit-taking soon.
As mentioned earlier on (refer to my chart on 12 Dec 12), I would expect STI to have some reaction at my resistance zone. Please see the chart and look at how beautifully the bulls and bears struggle in the region of 3,160-3,168. Of course at some days, STI even went to 3,175. As at 12.30 pm, it hovers around the region of 3,163. As a trader, I will not enter here. I will either tighten my stops or take partial profits. I think price will still be holding until all the merry making is over. LOL !
Some readers asked me why my chart is so simple without indicators? All I can say is that almost all indicators are lagging and they are a derived from price. There are specific uses for indicators, but not in this aspect.
STI broke its 12-months high of 3,100 and attained a high of 3,145 today. Looking at the chart, the Index is reaching the upper channel resistance as well as projected resistant of 3,160. I would expect market to react around these resistances. Expect profit taking in this region then follow by a small pause before market searches for new direction again.
DJ was +39 and local market resumes its vibrance with confidence. Like I said, window dressing in Dec. Funds are buying and STI reaches 3,107 at 10.50 am. It is around the market resistance of 3,110 for the last 12 months. Smart traders were already in the market when it turns around from 2,950. Getting in now would mean high risk but then, there is one whole month to play around. It seems that the market is having a short-term speculative play but I don’t eliminate the possibility of it breaking the resistance of 3,110. We shall see how the candles behave for the next couple of days to see if it really break 3,110.
After some shocks, STI manages to climb back to 3000 today. The previous support at 2945 holds and upon clearing the 3000 mark, the new support will be 3000. It is still weak but as we approach the window dressing months, I would expect STI to remain above 3000, unless there are other sudden mishaps in the US / Europe / China.