Picks of the week

Time for my weekend review again. For the short-term, the upwards movement of the Dow Jones is not confirmed by the declining volume. It closed with a black candlestick with relatively heavy volume so there is a bit of bearishness. In my opinion, there is still some way to go before the Dow Jones test the important resistance of around 14026 so i am currently feeling slightly bearish regarding the movement of Dow Jones.

Dow Jones Industrial Average Chart:


Regarding the Straits Times Index, i must admit i was a bit surprised when it reaches a new high despite the Dow Jones not doing so. Due to this, i was quite reluctant in buying for last week. So far STI has been diverging from the Dow Jones and ever since i started this blog, the movement of STI almost always parallel that of the Dow Jones so it's been a learning experience for me.

Currently STI is supported on it's previous resistance at around 3652 and a successful testing of this level confirms this. Since no index history can be referred to as STI hits a new high, the next resistance level can only be estimated by Fibbonacci retracement which i will post on my next few posts.

Straits Times Index Chart:


Quite a number of charts in my watchlist are ripe for a trade entry. Some have already taken off last week like ChinaKangda, Singtel, Ausgroup and Fibrechem. Below are some potential counters in my opinion which is strictly based on technical criteria.

ChinaAOil Chart:


There is a breakout of the resistance level at $2.53. Notice how the previous 2 white candlesticks were accompanied by very heavy volume. The only thing that is worrying is the divergence of the A/D line.

Delong Chart:


This is a new one which i never posted before. This counter looks good in my opinion. A confirmed ascending triangle formation with heavy volume looks bullish. Furthermore, the previous drop in price was accompanied by a A/D line bullish divergence. The only stumbling block is the downside gap which was not closed at near $3.43.

Sino-Env Chart:


This chart looks like the Delong chart except that there is an addition of a MACD lines crossover which is bullish. MACD crossover lines are reliable indicators but they tend to be either early or too late to indicate a buy signal.