20051014 Technical Outlook JetFM

Technical Outlook (14/10/2005 ) by Jupiter Research
CI again made another attempt to break the 930 level on the upside, the stock index succeeded to go above 930; but, it failed to surpass the previous day high of 931.66 and reached an intraday high of 931,43 before settled at 927.12. For Friday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 930.4 & 933.68 ; 1st and 2nd support levels will be 924.87 & 922.62 .
 
Chart wise : .. CI may not be able to sustain its position at the present level, 924 would be the level to watch. CI broke below the short term upward support line on the close basis, an initial indication of a weak market ahead; but, the volume was not decisive. Thus, CI would be likely to stage an upward rebound today to stay away from this "bearish" pattern. CI may have breached above 930 level in 4 consecutive days; but, the stock index again failed to close above 930 on the 4th day, that basically showed that whoever bought into the market lately was not confidence enough to garner adequate follow through buying from the market to push the CI to stay above 930. CI continued to be locked in a sideways situation. However, an initial analysis of market actions, the behavior of CI could probably signal a downward market soon; thus, CI may not be able to sustain its position at the present level between 922 and 932 as stock liquidation activities pick up. While 930 remained as a crucial level on the upside, we must also not forget 924 level as important reference point on the downside. If the CI were to slide below 924 and close below that level, we can expect more selling activities to roll into the market. Yesterday, CI opened at 928.51, 0.02 point higher than the previous day's close of 928.49. That action indicated a temporary urgency was created in the market, some traders did pay up the market to get his trading order(s) done; as a result, CI rose to 931.43. .. Selling pressure in the market was not strong ... On examination of the volume and price, 347.42 million of shares were traded compared to 412.63 million on 12/10/2005. A lower volume coupled with a close at 927.12 suggested the selling pressure was not strong.
 
Technical wise : MACD line fell to 1.65 (13/10/2005) from 1.72 (12/10/2005). But, the signal line readings also went up to 1.43 (13/10/2005) from 1.36 (12/10/2005), narrowing the gap with MACD line. Although an actual cross down to emit a sell signal has not happened, traders should be prepared for the situation. On Directional Movement Index, +DMI was at 11, down from 14 (12/10/2006); but, -DMI went up to 9 from 8 (12/10/2005). That gave a sign of stronger down move.  ADX inched lower from 40 (12/10/2005) to 34 (13/10/2005), a sign of trendless situation. As for Stochastics, %K line was getting further away from %D line, a sign of seeing a lower stock market. %K went down to 66.7 from 69.6 (12/10/2005); while %D fell from 72.14 (12/10/2005) to 69.0 (13/10/2005).
 
Our stock recommendation(s) for today is(are) :
Encorp (Trading Buy) at RM0.445 with a stop loss at RM0.39.