20051025 Technical Outlook JetFM
CI broke below 907.37 low on continued stock portfolio liquidation. "Funds" continued to sell in the market in absence of fresh leads, CI broke below last Friday's low of 907.37 to reach an intraday low of 904.45 before settled at 904.7. For Tuesday market, Pivot Profit methodology indicates that the 1st and 2nd resistance levels will be 909.94 & 915.19; 1st and 2nd support levels will be 901.95 & 899.21.
Chart wise: CI settled below 909, 900 level to be broken on intraday basis. With a close of 904.7, CI has now registered a 9th consecutive down close since 12/10/2005, a scenario that has not been seen for some time. In general, a straight down close for 9 consecutive days was a bearish pattern and did not present a comfortable picture to any traders. While the market expected to see more downside below 900-level in next few days; but a preliminary analysis of the situation revealed that we should begin to see some up closes first after 1 or 2 more down closes before we could see CI falling below 900-level. An up close should not be deemed as a beginning of a rally. Thus, traders should not rush in to buy more stocks; instead, they should take that as an opportunity to further reduce stock portfolio in hand as the up closes should be seen just a market reaction of the recent downward move. As at 24/10/2005, CI has not provided any positive sign of turning up yet. In view of that, CI was expected to trade lower than 904.5; however, some renewed buying interest would be seen as CI goes near 900 - 904 level today. An analysis of this price and volume relationship showed that an intraday break below 900 would be likely in today's market as there would be attempt to push the CI back up 900-level. Yesterday CI may have closed below 909; but the close was not accompanied by decisive volume, that could probably signal a limited downside. In an analysis of Fibonacci Retracement studies, CI next downside target would be 888 based on was at 161.8% 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 -2.8 (24/10/2005) from -1.78 (21/10/2005) with signal line readings also dropped to -0.59 (24/10/2005) from 0.04 (21/10/2005), 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 was down to 43 from 45 (21/10/2005) and +DMI was flat at 2, unchanged from 21/10/2006. ADX rose higher from 61 (21/10/2005) to 67 (24/10/2005), an indication of a better trending situation compared to 21/10/2005. As for Stochastics, %K line continued to stay below the %D line in the oversold zone. %K line moved further away from %D line, a sign of lower market. %K dropped to 15.0 from 22.8 (21/10/2005) with %D also fell from 31.3 (21/10/2005) to 23.2 (24/10/2005). Traders must therefore start to exercise some caution for a possible correction in next few days.
Our stock recommendation for today is:
Selangor Property (Trading Buy) at RM2.44 with a stop loss at RM2.33
Chart wise: CI settled below 909, 900 level to be broken on intraday basis. With a close of 904.7, CI has now registered a 9th consecutive down close since 12/10/2005, a scenario that has not been seen for some time. In general, a straight down close for 9 consecutive days was a bearish pattern and did not present a comfortable picture to any traders. While the market expected to see more downside below 900-level in next few days; but a preliminary analysis of the situation revealed that we should begin to see some up closes first after 1 or 2 more down closes before we could see CI falling below 900-level. An up close should not be deemed as a beginning of a rally. Thus, traders should not rush in to buy more stocks; instead, they should take that as an opportunity to further reduce stock portfolio in hand as the up closes should be seen just a market reaction of the recent downward move. As at 24/10/2005, CI has not provided any positive sign of turning up yet. In view of that, CI was expected to trade lower than 904.5; however, some renewed buying interest would be seen as CI goes near 900 - 904 level today. An analysis of this price and volume relationship showed that an intraday break below 900 would be likely in today's market as there would be attempt to push the CI back up 900-level. Yesterday CI may have closed below 909; but the close was not accompanied by decisive volume, that could probably signal a limited downside. In an analysis of Fibonacci Retracement studies, CI next downside target would be 888 based on was at 161.8% 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 -2.8 (24/10/2005) from -1.78 (21/10/2005) with signal line readings also dropped to -0.59 (24/10/2005) from 0.04 (21/10/2005), 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 was down to 43 from 45 (21/10/2005) and +DMI was flat at 2, unchanged from 21/10/2006. ADX rose higher from 61 (21/10/2005) to 67 (24/10/2005), an indication of a better trending situation compared to 21/10/2005. As for Stochastics, %K line continued to stay below the %D line in the oversold zone. %K line moved further away from %D line, a sign of lower market. %K dropped to 15.0 from 22.8 (21/10/2005) with %D also fell from 31.3 (21/10/2005) to 23.2 (24/10/2005). Traders must therefore start to exercise some caution for a possible correction in next few days.
Our stock recommendation for today is:
Selangor Property (Trading Buy) at RM2.44 with a stop loss at RM2.33
posted by emacro @ 8:55 PM
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