Weekend review of STI and DJIA

Dow Jones did not hold the trendline dat i posted for my last post. It broke the trendline convincingly and now we are looking at at the Aug and Nov correction support levels again.

The level of around 12710 is the level for the prior corrections as seen on the chart and we shall see how DJIA approach this level. This level is a very significant level so there is some chance that it will bounce off this level by showing a hammer candlestick perhaps. If it breaks this level, it will be very bearish since this will result in a lower low according by Dow theory.

Notice that the trendline for the A/D has been breached and there is also a MACD crossover.

Dow Jones Industrial Average:


For the Straits Times Index, it rebounded off the resistive trendline. Similar to the DJIA,
the level of around 3300 will be a crucial level since it was the support levels for the August and Novemeber correction levels thus this level is likely to act as a support. We shall see how STI test this level too.

One thing is for certain and that is STI will gap down for the opening on Monday since DJIA closed so badly on Friday.

Straits Times Index:


Lian Beng broke out of it's historical closing level on last thursday and we saw a doji on friday. The candlesticks were unshaven which implies that they did not close near their highs so this does not give a good signal of a strong breakout. It is likely we may see some retracement back to $0.78 before the start of any other movement. $0.78 is a significant level since by technical analysis, resistance levels often converts to support levels. It was a resistance level twice thus now it has turn to become a support level. Notice also dat the volume has become light again.

Lian Beng:


For ChipEngS, it's hard to determine where it is heading. It is falling with declining volume and that is very typical of a flag formation. Gotta see what this develops into.

ChipEngS:


ChinaXLX broke out of it's resistive trendline on friday. This counter has been under my watchlist for a long time. It should land around the 50% fibbonacci retracement level which is also near the resistive turn support trendline.

ChinaXLX:

Construction sector in play ?

I noted ChipEngS aka CES on the top movers section today. It closed with a white candlestick with heavy volume. As seen in the chart, CES broke the resistive trendlines today. It seems to me that this looks like a triangle formation.

ChipEngS:


Another counter is Lian Beng which is approaching it's historical closing level. It closed with a shaven white candlestick with it's volume picking up but failed to break above it's historical level. On the weekly chart which i din post it, it seems to me that the volume has been decreasing steadily and dat looks suspect to me.

Lian Beng:



Both counters are trending on breakouts so DJIA's performance tonight will be important. A positive closing of more than around 1% for the DJIA will signify that the counters will gap up tomolo on opening and it may be possible to ride on the momentum.

DJIA is holding on the trendline drawn in my chart for the last post but contary to my expectations, it fell through the 200d MA. Like what Decipher said in his blog, DJIA may be poised for a rebound from this trendline so let's see how DJIA close tonight.

Weekend review of stock market

For the latest closing, we see the Dow Jones forming a huge black candlestick with heavy volume and that is bearish. To be honest, from the technical analysis point of view, it seems to me that there was no technical signs that the Dow Jones is going to suffer such a huge drop. There was no bearish divergence or any breaks in trendline. The only consolation was that since the Straits Times Index takes it's sentiment for the opening from the Dow Jones, we can always use the performance of the Dow Jones to roughly gauge the performance of the STI.

Dow Jones was supported by the 100d EMA on the previous dip. This time round, it has closed slightly above the 100d EMA while testing it. There is a chance that it will be supported on the 100d EMA this time round.

Dow Jones Industrial Average:


Straits Times Index suffered a drop and open on a gap down due to the poor closing of the Dow Jones. This is a sign that the sentiment of the STI is still quite linked to the Dow Jones. STI was supported on the 50d EMA on the previous drop so there is a chance that the 50d EMA may act as a support. But there is still a small distance between the closing and the 50d EMA. Another possibility is that the STI may form a double bottoms.

Straits Times Index:


Last friday was a good day to filter out potential stocks. This is because both the STI and the Dow Jones perform badly that day. If we can find counters that defy the index and still move upwards, those counters are very bullish indeed since they can ignore the sentiment of the market. Some of the counters i spotted includes Lian Beng, AdvSCT and Straits Asia and CH offshore.

Currently i am looking at CH offshore. I was tempted to buy on friday but i decided to be disciplined and wait til near the closing to see if a breakout above $1.01 was confirmed. $1.01 is a strong resistance level and has been tested numerous times but all attempts failed to close above it. A close above $1.01 will be very bullish.

CH offshore:

Uptrend continues

The outcome of the Fed meeting was that the interest rate was cut. This resulted in the Dow Jones heading north by quite a significant amount. But to my surprise, STI did not gap up and closed with a black candlestick. Perhaps, the market had factored in the cut already so it did not went up strongly.

Some charts and their price action caught my attention today. Lian Beng was in the top volume list throughout and it broke a trendline with significant volume. Furthermore, there was another bullish technical signal and that appeared in the form of the MACD lines having a crossover. The chart reminds me of China Hong though since both charts are very similar.

Lian Beng:


CH offshore tested the $1.01 resistance today and failed to close above it. The $1.01 is a strong resistance line which has been tested a lot of times but it failed to close above this. Going by the short-term channel, it broke above the channel with very high volume and that is bullish. Furthermore, there is a MACD line crossover and that is bullish too. I am now waiting for a close above it with high volume.

CH offshore: