20051020 Technical Outlook JetFM
Technical Outlook ( 20/10/2005 ) by Jupiter Research
CI experienced a "blow off" after weeks of small trading range. Having confined in tight trading range for so many weeks, CI yesterday experienced a "blow off" with highest fluctuation of 12.79 points since 10/6/2006. CI trended downward immediately after the opening bell, the stock index traded to an intraday lower of 909.54 as some stock portfolio liquidation activities powered its way down; however, CI recovered from the low to close at 914.17 on bargain hunting. For Thursday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 921.15 & 928.14; 1st and 2nd support levels will be 908.36 & 902.56.
Chart wise: 5th consecutive down close; but renewed buying interest likely as CI draws near 905. A true picture of supply and demand relationship was finally reflected in CI after weeks of lacklustre trading; that was believed to be what traders wanted to see all this while, the true side of the market. CI was down heavily yesterday as market forces particularly the "selling" side created the volatile fluctuation in the stock market. CI has not only registered the biggest fall in weeks; but the down close yesterday represented the 5th consecutive down close in the past 5 trading days. That was simply a reflection of an underlying weak market. While market was expected to go lower, renewed buying interest would begin to roll in as CI started to move near 905-level. CI down pace accelerated when it crossed below 920, because more "Funds" were better informed of a lower market. On examination of the market action, selling pressure was certainly much stronger than buying power; thus market today would likely to open at previous day close level before trade down to 905. In an analysis of Fibonacci Retracement studies, CI was at 83.88% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005).
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -0.02 (19/10/2005) from 0.88 (18/10/2005) with signal line readings also dropped to 0.994 (19/10/2005) from 1.28 (18/10/2005), an indication of stock market into downtrend. On Directional Movement Index, -DMI continued to rise above the +DMI as market closed lower. On the reading scales, -DMI went up to 48 from 24 (18/10/2005) and +DMI was down to 3 from 5 (18/10/2006), an indication of stronger selling than buying. ADX inched higher from 36 (18/10/2005) to 46 (19/10/2005), an indication of a better trending situation compared to 18/10/2005. 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 41.4 from 49.3 (18/10/2005) with %D also fell from 55.3 (18/10/2005) to 48.4 (19/10/2005).
Our stock recommendation for today is:
BRDB (Trading Buy) at RM1.18 with a stop loss at RM1.14
CI experienced a "blow off" after weeks of small trading range. Having confined in tight trading range for so many weeks, CI yesterday experienced a "blow off" with highest fluctuation of 12.79 points since 10/6/2006. CI trended downward immediately after the opening bell, the stock index traded to an intraday lower of 909.54 as some stock portfolio liquidation activities powered its way down; however, CI recovered from the low to close at 914.17 on bargain hunting. For Thursday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 921.15 & 928.14; 1st and 2nd support levels will be 908.36 & 902.56.
Chart wise: 5th consecutive down close; but renewed buying interest likely as CI draws near 905. A true picture of supply and demand relationship was finally reflected in CI after weeks of lacklustre trading; that was believed to be what traders wanted to see all this while, the true side of the market. CI was down heavily yesterday as market forces particularly the "selling" side created the volatile fluctuation in the stock market. CI has not only registered the biggest fall in weeks; but the down close yesterday represented the 5th consecutive down close in the past 5 trading days. That was simply a reflection of an underlying weak market. While market was expected to go lower, renewed buying interest would begin to roll in as CI started to move near 905-level. CI down pace accelerated when it crossed below 920, because more "Funds" were better informed of a lower market. On examination of the market action, selling pressure was certainly much stronger than buying power; thus market today would likely to open at previous day close level before trade down to 905. In an analysis of Fibonacci Retracement studies, CI was at 83.88% retracement of a move from 953.88 (4/8/3005) to 906.54 (2/9/2005).
Technical wise: MACD line cut down the signal line from above to emit a "sell" signal on 17/10/2005. MACD readings fell to -0.02 (19/10/2005) from 0.88 (18/10/2005) with signal line readings also dropped to 0.994 (19/10/2005) from 1.28 (18/10/2005), an indication of stock market into downtrend. On Directional Movement Index, -DMI continued to rise above the +DMI as market closed lower. On the reading scales, -DMI went up to 48 from 24 (18/10/2005) and +DMI was down to 3 from 5 (18/10/2006), an indication of stronger selling than buying. ADX inched higher from 36 (18/10/2005) to 46 (19/10/2005), an indication of a better trending situation compared to 18/10/2005. 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 41.4 from 49.3 (18/10/2005) with %D also fell from 55.3 (18/10/2005) to 48.4 (19/10/2005).
Our stock recommendation for today is:
BRDB (Trading Buy) at RM1.18 with a stop loss at RM1.14
posted by emacro @ 7:39 PM
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