SC Global

SC Global has come a long way since hitting a low of $0.295 on Mar 09. Prices tested $1.42 on 5 Oct 09 before rebounding to close at $1.63 on Friday 9 Oct 09.

SC Global is in the luxurious property sector. Sale of Seven Palms Sentosa Cove got underway and it managed to sell 6 out of 10 released units in a recent private preview. Transacted price range from $3,100-$3,400 psf with each unit costing $11m.

The technical charts are also showing improvements following the test of $1.42 on 5 Oct. Prices is on the rise and is set to test $1.77 level. MACD indicator is about to make a bullish crossover. However volume for the recent rebound has been on low volume which shows that market players are still not coming back in full force.

Last Friday, this counter makes a Doji pattern. If the price can break the $1.77 level on high volume, we could see $2.00 soon.

Singapore Market

STI index has stayed within a 200 points range since it broke the 2424 resistance level in mid July 09. The bulls pushed the index to 2700 on 4 Aug 09 but could not overcome the sellers that came in to take profit.

The market correction that analysts talked about has materialized. Investors have been buying on dips and that strategy seems to be working since March 09.

The technical charts are showing warning signs. –DI has just made a crossover with the +DI. MACD histogram has been fluctuating about the zero line which shows a directionless market. However the MACD indicator has recently pulled away from the signal line meaning that selling is gathering pace.

With Dow closing down 42 points on Friday, there will be some selling pressure early next week. Another thing to note is the strength in Japanese yen. USDJPY currency pair traded at a low of 89.50 before recovering slightly to close at 89.84. This will exert some pressure on the Japanese equity market next week as well as strength in yen is bad news for Japanese exporters.

The support level to watch is 2560, 2521 and 2424.

Shanghai Market

Shanghai market tested the uptrend line this week. The good news is the uptrend line is still intact with the support level holding on to attacks from the bears.

However there are a few warning signs appearing on its weekly chart.

Firstly, the MACD indicator has cut down from its signal line. The indicator has stayed above its signal line since end of Nov 08.

Secondly, the +DI is about to go below the -DI line. This indicates that the uptrend may be slowing down.

The critical level to watch is the uptrend line. The index needs to stay above the uptrend line. If it closes below uptrend line, a sell down may be in the cards.

Dow Potential RSI Divergence

Dow closed at 9544 on Friday, down 36 points for the session. For the week, the index rose 39 points.

The technical picture is mixed at this point.

The ADX and DIs indicators are indicating a continuing up trend.

RSI is showing a divergence pattern with the Dow making a high this week but with no confirmation from the RSI indictor. This is bearish and suggests a possible sell down.

The MACD indicator is not able to make a decisive crossover with its signal line and it shows that the bull’s strength is waning.

The moving average is showing a bullish picture with the Dow above its 14, 25 and 50 day moving average.

At this point, the bulls and bears are equally matched and there is no clear evidence of where the market is going. However I will lean more towards the bear's camp.

STI Update

Singapore market closed slightly below 2600 level on Friday. This was the first time the market made a series of “Black Candles” since it broke out of the 2424 level on 20 July 09.

Fibonacci retracement level is at 2527 (38.2%) and 2417 (61.8%) respectively.

RSI has dropped from overbought levels and is now at 57 level. There is no RSI divergence at this point and this suggests that the up trend is still intact.

MACD just made a bearish crossover. This indicates weakness in the near term.

+DI is still above –DI. However it looks set to go below the –DI.

The index is still above the uptrend line. Unless the index drops below this trend line, the market should continue to trend higher.

Dow Updates

Stock market has rallied across the board. The Dow Industrial Average is now above 9000 level. The index is currently at Jan 2009 level.

Technically, the charts are looking better. Just a few weeks ago, there was a possibility of a sell-off based on the head and shoulder pattern. That did not materialize. And when the pattern failed, the market rallied. The reverse seems to be happening. An inverse head and shoulder is now in the picture.

The ADX chart is showing the development of an uptrend, with +DI above –DI and ADX moving towards 30 levels.

MACD is indicating a bullish trend as well with the indicator above its signal line.

RSI is now at overbought levels but it an uptrend situation, market can stay at overbought levels for longer periods.

Based on the monthly charts, the 50% Fibonacci retracement level is at 9176 and 61.8% retracement level is at 9825 level. Market needs to scale these 2 levels for up move to continue.

Let’s see if the market is able to stay above 9000 level next week.

Happy trading!

Dow Industrial Average Potential Head & Shoulder Pattern

Stock market around the world is in corrective phase except for the Shanghai market which went above the 3000 resistance level.

If you look at the technical charts from US, Hong Kong, Singapore etc, the charts are all showing a potential head and shoulder pattern.

For US Dow Industrial Average, the index needs to stay above 8200. If it breaks this level, the right shoulder will be completed and it suggests a target of 7523.

Let’s see if the US market is able to hold on to 8200 level next week.