20051018 Technical Outlook JetFM
CI closed below 924 to see a lower market. Despite traded lower on 17/10/2005 after broken below the short term upward sloping support line on the downside on 14/10/2005, CI rose to an intraday high of 926.58 before settled at 922.64 as profit taking activities came in to force the CI lower. For Wednesday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 925.95 & 929.27; 1st and 2nd support levels will be 919.95 & 917.27.
Chart wise: 4th consecutive down close, a reflection of weak market. CI may have only registered a marginal down yesterday; but, yesterday close was the 4th consecutive down close in past 4 days. That was simply a reflection of an underlying weak market, CI was therefore believed not to stay strong at present level. Profit taking activities would continue to roll in gradually at this juncture as there were traders who still held the belief that the market was "strong" and reluctant to accept the violation of short term upward sloping support line as an initial sign of a down move. Market should find some buying support as CI approaches 915. However, the selling pressure was expected to accelerate when 915-level were to be penetrated on the downside, because more traders would be likely to rush into market to cash out part of their stock portfolio as more traders become better "informed" of the real trading situation. CI may be still about 7.64 points away from 915-level, it was not that far actually, traders should begin to look into the possibility of market going down lower and be prepared to design an exit trading plan to take profit. In an analysis of Fibonacci Retracement studies, CI was at 34% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005). At 50% of retracement level, CI would be at 930.21.
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. This line crossing should provide a signal to traders that a further decline could not be underestimated. MACD readings fell to 0.88 (18/10/2005) from 1.22 (17/10/2005) with signal line readings also dropped to 1.28 (18/10/2005) from 1.39 (17/10/2005). On Directional Movement Index, -DMI was above the +DMI as market closed lower. On the reading scales, -DMI went up to 24 from 15 (17/10/2005) and +DMI was down to 5 from 7 (17/10/2006), an indication of stronger selling than buying. ADX inched higher from 29 (17/10/2005) to 36 (18/10/2005), an indication of a better "trending" situation compared to 17/10/2005. As for Stochastics, %K line continued to stay below the %D line in the neutral zone. %K line moved further away from %D line, a sign of lower market. %K dropped to 49.3 from 56.2 (17/10/2005) with %D also fell from 61.3 (17/10/2005) to 55.3 (18/10/2005).
Our stock recommendation for today is:
VS industries (Trading Buy) at RM1.19 with a stop loss at RM1.14
Chart wise: 4th consecutive down close, a reflection of weak market. CI may have only registered a marginal down yesterday; but, yesterday close was the 4th consecutive down close in past 4 days. That was simply a reflection of an underlying weak market, CI was therefore believed not to stay strong at present level. Profit taking activities would continue to roll in gradually at this juncture as there were traders who still held the belief that the market was "strong" and reluctant to accept the violation of short term upward sloping support line as an initial sign of a down move. Market should find some buying support as CI approaches 915. However, the selling pressure was expected to accelerate when 915-level were to be penetrated on the downside, because more traders would be likely to rush into market to cash out part of their stock portfolio as more traders become better "informed" of the real trading situation. CI may be still about 7.64 points away from 915-level, it was not that far actually, traders should begin to look into the possibility of market going down lower and be prepared to design an exit trading plan to take profit. In an analysis of Fibonacci Retracement studies, CI was at 34% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005). At 50% of retracement level, CI would be at 930.21.
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. This line crossing should provide a signal to traders that a further decline could not be underestimated. MACD readings fell to 0.88 (18/10/2005) from 1.22 (17/10/2005) with signal line readings also dropped to 1.28 (18/10/2005) from 1.39 (17/10/2005). On Directional Movement Index, -DMI was above the +DMI as market closed lower. On the reading scales, -DMI went up to 24 from 15 (17/10/2005) and +DMI was down to 5 from 7 (17/10/2006), an indication of stronger selling than buying. ADX inched higher from 29 (17/10/2005) to 36 (18/10/2005), an indication of a better "trending" situation compared to 17/10/2005. As for Stochastics, %K line continued to stay below the %D line in the neutral zone. %K line moved further away from %D line, a sign of lower market. %K dropped to 49.3 from 56.2 (17/10/2005) with %D also fell from 61.3 (17/10/2005) to 55.3 (18/10/2005).
Our stock recommendation for today is:
VS industries (Trading Buy) at RM1.19 with a stop loss at RM1.14
posted by emacro @ 7:46 PM
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