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DJIA & STI Update
Dow & STI have both made pretty good gains last week (782 points or +9.7% and 70.47 or +4.2% respectively). On the chart, both indices are still bullish. However, beware of bear trap at this time. After multiple straight sessions of gains. The upcoming week should see some retracement despite the charts still look bullish. I hope the retracement is a healthy one and not a nasty one! If nothing too violent happen, the indices should trend up further thereafter ( STI target 1900 ). After that, we will need to look at the chart again as another chart I monitor ( the Elliot Wave chart ) still maintain there is another heavy leg down.
As I said, the American won't want to see too much bloodshed before the long holiday. So prices held but volume was thin. The falling volume amid rising prices (price/volume divergence) last week in the DJIA chart make me feel that the gain may not sustain. Last year, when Wall Streets returned from Thanksgiving. Dow dipped 237 points. We will know how is it this year on our Tuesday!
-- last edited : Sunday, Nov 30, 12:20pm
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Labels: Market Direction
China XLX
S-Chip is in play again? China XLX broke a downtrend trend line today with substantial volume. ADX shows downtrend has weakened & +DI / -DI lines show bullishness.
ADX is an excellent technical indicator measures the strength of a trend. It does not tell you if the trend is up or down, it just tells you how strong the current trend is! High readings indicate a strong trend and low readings indicate a weak trend. A move above 20 suggest the start of a new trend (either up or down) and a move below 40 suggest that the current trend may be coming to an end.
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Labels: Stock Pick
STI Near Term Move
In a bull market, sell (bearish) signal don't work very well. In a bear market, buy (bullish) signal don't work very well. This was what I have been taught during a full day technical analysis course some 20 months back. At that time, it was still a bull market. There was no chance to validate what I have learnt. Today, I fully appreciate this. Look at the number of failed buy signals I have observed in this bear market. It is definitely safer to bet on the bearish side than the bullish side in this market. 80% of time a bullish call won't work and vice versa..
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That said, my bet for the next few weeks until year end for STI is bullish bias. I know I only have 20% chance to be correct but this is what I see now. I think the two blue lines in the chart should form a channel. A double bottom ( 10/24 & 11/20 ) was formed at the channel support. Friday's close has just rebounded from the channel support. If the support don't break, it should be heading toward 1900.
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.These days, when Dow rose or fell by a high triple digits ( eg: +400 or -400 ). Local market will follow in the same direction the next day but only for 1/2 or 3/4 of a day than gains or losses will be pared before end of the trading day.
.A word of caution, if the assumption of the channel mentioned above is wrong. We are also looking at a potential D-triangle formation in the STI chart. Chart pattern recognition is like kids' imagination of cloud in the sky. One kid may co-relate the cloud with a tiger, another may co-relate it with lion. When the market unfolded fully, the winner unvealed..
Labels: Market Direction
DJIA - Updated Chart
.Despite the formation is not quite perfect, the D-Triangle (Descending Triangle) did breakdown. Dow dropped 868 points in two straight days to close at 5 years low Thursday at 7,552.29 ( intra-day low 7,464.51 ). Oct 10 low of 7.882 was taken! The closing on Thursday sat at a trend line support ( dotted line ). This may suggest Dow could take a respite before further downside (or, it may just pierce through the support which will be very bearish). Next week is a short trading week in US due to Thanksgiving holiday. Volume is likely to be thin and prices should probably move sideways with downward bias as the American won't want to see too much bloodshed before the holiday. But selling may resume after the holiday!
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(Update on Saturday): Dow up 494 Friday as Obama prepares to name Timothy Geithner the treasury boss. The DJIA ended the week down 450.89, or 5.31%, at 8,046.42.
Labels: Market Direction
DJIA - Caution
.Not a perfect D-triangle setup ( eg: volume did not contract the way it should ) but worth watching if support would break! Real life scenario may not be as perfect as textbook model.Labels: Market Direction
AusGroup - Example Of Breakout
AusGroup rose 4.5 cents or 20% on Friday to close at .27. The rally was backed by high volume which is typical of trend line breakout. This is the 2nd breakout within a week bringing AusGroup's with a price gain of 100%. Further upside is expected from here....
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The above explain why I am watching Synear so closely. Whether it will breakout or not, I won't know ( when prices are touching trend line resistance, it will either breakout or u-turn ). But if it is able to breakout successfully, AusGroup is a good example of where Synear will be heading.
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How to tell whether a breakout take place during intra-day:
During intra-day, if price surge at the back of high volume ( before mid-day, volume has reached full day volume of a normal day ). Normally, we say buy on dip but for breakout play, buy on breakout.
Labels: Trading Digest
Victory for Obama
US stocks advanced in the biggest presidential Election Day rally in 24 years, since the New York Stock Exchange first opened for trading on polling day. Dow rose 305.45 points overnight. Asian stocks soared to a 3-week high as markets reacted to news of Barack Obama's win in the U.S presidential elections. STI rose 2.1% to 1,868.82. During intra-day, STI gained as much as 100 points to 1,933.51.
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Synear Update:
Synear attempted to test .28 today but failed to break it. .28 is the trend line resistance. Look up for its re-attempt in the near future ( since the trend line is declining, subsequent breakout targets should be lower, eg: .27, depending on when the attempts take place ).
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SembMar:
On Sunday, I made a post in the protected area for my own reference. The post was protected because it contents information of my portfolio not suitable to share it publicly. But basically, I spotted the bullishness of SembMar ( see chart below ). Closing today breaks the first trend line & Fibonacci 23.6%. Next two targets are $2.5 & $2.9. Potential Elliot Wave reversal at $3.15.
After advancing for many days, profit takings should set in before it continues the advance.
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Labels: Trading Digest
Synear
Potential breakout?
Entry: when price break above .28 with high volume.
Exit : .35
Valid only if breakout take place.
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Labels: Stock Pick
STI / SembMar
STI : The day to day movement of STI is pretty difficult to predict as volatility persist and that the index has been taking its cue from Dow & regional bourses. However, the general near term trend is bullish. Level to watch are 1,900, 2,050, 2,200. Crucial level is 2,400 ( potential reversal point ).
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Labels: Market Direction
