STI Update

We have a pullback of the index this week. STI dropped from 1896 to close at 1852 for the week. The index went below the 61.8% retracement level on Tuesday but was able to snap back from the losses.

As long as the index is able to hold above 1754 level, we still have a pattern of higher highs and higher lows. This bode well for the bulls.

The 50 day moving average is upward sloping and the index is still above this moving average line. Bears will not be aggressive in shorting the market with an upward sloping 50 day moving average. The bigger bears will come to the market if we see the index dropping below this average line.

One of the worrying sign is MACD indicator. This indicator just made a cross below its signal line.
Support level is at 1813 and 1754. Resistance is at 1868 and 1950.

STI Update

STI index retraced the complete downswing from 1780 to 1455. The index fell 13 points on Friday.

The index has stayed above its 50 day moving average for 5 trading days now. Any fall is healthy if the index can stay above its 50 day moving average.

A similar situation occurred in Jan 2009 where the index went above its 50 day moving average only to make a new low of 1455 on 10 Mar 09.

A bullish scenario will be for the index to fallback to its 50 day moving average before making a bullish move that takes out the high of 1780.

Support level is at 1711 and 1657 respectively. Resistance is at 1780, 1844 and 1959.

US Market Update

Dow Jones rebounded from its low of 6440 set on 9 Mar 09 to end at 7278 yesterday. That is about 13% rebound in the span of 2 weeks.

The rebound has taken the index right up to its 50 day moving average. Last night the market was not able to take out the 50 day moving average. That is not a good sign. However, it may turn out to be just a pause before the index attacks its 50 day moving average again. A lot will depend on whether there is any good news to lift the market next week. The index has fallen back into its downtrend channel and if it is not able to go above it's 50 day moving average next week, the downtrend will resume and index may test the low of 6440 again.

The 7392 level now serves as a critical resistance that the index needs to overcome in order for the rally to continue. Support level is at 7041.

This is not the time to establish huge positions. It is best to let the market decides which way to go below going in for the ride up or down.

Dow Update

Dow industrial average has fallen to 1997 levels. It has broken its Nov 07 low of 7392. The picture looks bad at the moment. ADX is at 49 levels and –DI is above +DI. This suggests a continuation of the down trend. MACD indicator has also crossed below its signal line, another bearish indication. The only bright spot is that the RSI indicator has not made a new low yet and divergence of RSI can still occur. For trend to reverse, Dow has to conquer the resistance at 7392 and 9175. In the mean time, the bears have the upper hand.

Dow Jones

The Dow Jones Industrial Average looks to be forming a bottom. The index is near its Nov 07 low of 7392. The trend is still bearish at this point in time. However there are 2 positive signs in the technical charts. Firstly, the weekly MACD indicator is above its signal line and secondly, the weekly RSI seems to be forming a divergence signal. The index needs to break the downtrend channel line in order for a sustainable rally.

Resistance level is at 8446 level and support is at 7392 level.

Capitaland

It is interesting to see Capitaland shooting up even though it announced a rights issue.

The technical indicators sure look good at the moment. The MACD made a bullish crossover on 10 Feb 09 on heavy volume. Stochastic indicator also made a bullish crossover. RSI is increasing and is not in overbought/oversold territory.

The stock is approaching resistance at $2.90. This level also coincides with the upper Bollinger Band.

Let’s see if the stock can penetrate the $2.90 level today.

SPC

SPC had a good run recently. It rallied from a low of $2.18 on 21 Jan 09 to a high of $2.86 on 9 Feb 09. Goldman Sachs downgraded the stock from “neutral” to “sell” and reduced its target price from $1.80 to $1.60.

The stochastic indicator is indicating short term weakness as the %D line has just crossed under the %K line making a bearish crossover.

The force index has also decreased from a high value and it looks to be going negative anytime soon.

The next support level for this stock is at $2.49.