DJIA at pivotal point

Dow Jones seems to be at a pivotal point now. Prior support level has turned resistance level for now. Furthermore, DJIA seems to be resisted by a trendline and this is further confirmed by the doji formed yesterday. Let's see how it goes tonight.

Dow Jones Industrial Average:

Breakout from upside

Well, as the title of my post said, the bulls have won currently and this is seen in the breakout from the upside of the triangle formation which was formed over the past few sessions. This can be seen from the chart below

Dow Jones Industrial Average:

Weekend review of DJIA and STI

Actually there isn't much of a review to do for this week cos next week is the decisive week for the next subsequent trend. The earning report season which accounted for the rally last week is almost over. There will be subsequent US economic data being released along with the Fed meeting and that will be the deciding factor.

Well as a lot of technicians like to say, all news will be reflected in the chart. For the chart of the Dow Jones, it closed just below the resistive trendline last friday. There isn't much valuable information for me to gleam from the chart. Current trend is the market is showing indecisiveness since it has formed higher lows and a lower highs and that coincide with the news that the market should be waiting for next week before deciding on the trend.

Dow Jones Industrial Average:


The same goes for the Straits Times Index. Currently it is resting on a support level created by the previous two gap up. It seemed to rebound off the resistance at around 3150 but nothing is pivotal at this point of time. Let's see how the trend will be confirmed next week and we will be riding a trend hopefully soon.

Straits Times Index:

Ominous candlestick for DJIA

I spotted a ugly looking inverted hammer on the chart of the Dow Jones. Notice that the wick of the candlestick is very long and this adds to the potency of the candlestick. Basically, the inverted hammer tested the resistive trendline successfully. I am inclined towards a break of the downside of the triangle formation as mentioned in my last post.

Dow Jones Industrial Average:

Weekend review of DJIA and STI

Since my last post, there has been a short term rebound as mentioned in my last post from the point of technical analysis and there has been new development. What can we expect from the chart at this point of time ?

For the Dow Jones, it is now forming a triangle formation and this shows even strength between the bulls and the bears since the DJIA has been forming a lower high and a higher low. It will be prudent to see which side of the triangle it breaks out from. If it breaks from the downside, a new downtrend will begin and vice versa. The next support level will be around 11620.

Dow Jones Industrial Average:


Onto the Straits Times Index, the previous gaps down has been negated or covered back in the last few days. This is due to the bullish sentiment for the budget day thus for that few days before budget day, STI's movement is diverging from the DJIA. Now that the budget is out, the movement of STI is likely to converge back with the DJIA with the DJIA taking the lead. The next resistance level to watch out for will be around 3150 . There are also other resistances such as the resistive trendline which has been tested thrice and the 50d EMA.

Straits Times Index:


Sembcorp caught my attention since it is now at a pivotal point. The prior support level of $4.87 has now become a resistance level which has been tested successfully once so far and now it is near this level. At this level, it formed a hanging man candlestick which is bearish by nature. However, there is also bullish divergence in the A/D line and the RSI so it is conflicting in this sense. Whether it can break out from this resistance or bounce off this will probably depend on movement of the indices.

Sembcorp:

Poising for a technical rebound

From the looks for the Dow Jones chart, it seems that DJIA is poised for a rebound soon. Currently, it is residing on the fibbonacci 23.6% support level. The last 3 candlesticks had a long tails which resemble tweezers bottoms so in my opinion, these factors suggest a rebound should be near soon. The next resistance level will be around 12750.

Dow Jones Industrial Average:


For the chart of the Straits Times Index, it formed a island reversal formation and that signifies a downtrend. Following this, there was a huge gap down and this gap will be acting as a resistance level. Since i expect the DJIA to be rebounding soon, i believe STI will be following suit.

Straits Times Index:


However, both of the intermediate trends for both STI and DJIA are still down. Remember that the subprime issue is not something which can be resolved easily so i believe the coming rally will be still a technical rebound.

Chart with regularity

I spotted NOL forming a nice channel. Currently it's very near the channel resistance and this is a good opportunity to go short. Furthermore, the intermediate trend is down since it has been forming a lower high and a lower low. This chart is very similar to the chart of Cosco Corp too.

NOL:

Chinese New Year gloom

First of all, a very happy chinese new year to all of you :) But i guess the festive spirit somehow did not spread to the markets.

For the Dow Jones Industrial Average, it broke out of it's rising bearish wedge formation and it closed with a shaven black candlestick with heavy volume. It is expected as it failed to broke through the resistance level that was highlighted in my previous posts. The next support level is likely to be at around 11620. This also register as another time where the Dow Jones failed to make a higher high.

Dow Jones Industrial Average:


For the Straits Times Index, it opened with a huge gap downwards below the psychological support level of 3000 easily despite STI opening only for half a day today. Next likely area of support is 2744.

Straits Times Index:


Cosco Corp seems like a prime candidate for shorting. It bounced off it's resistive trendline with a inverted hammer and it broke the gap support at $4.4. Furthermore, the A/D line is also showing bearish divergence. The likely support level or the target price is around $3.83.

Cosco Corp:


Yangzijiang seems to be ready to be shorted too. It broke out of it's triangle formation but it rallied back to touch the support now turned resistance trendline. Notice that it failed to close back above this trendline. However, this counter seems to be slightly riskier than Cosco Corp in my opinion since the support level is quite near.

Yangzijiang:

A week of whipsaws

This week has been a week full of whipsaws. Whipsaws in technical analysis, in my own layman term is that price action seems to break through a crucial level but it only broke through slightly thus giving the impression that it has broken through it, only to discover in subsequent closings that it din go in the forecasted direction.

This can be seen in the Straits Times Index. There was a gap up previously and this act as a resistance. Subsequently there was a closing above the gap and it seems that this resistance has been broken but it headed south again. Now there was a gap down too previously and this acted as a support. The closing on thursday seems to suggest that this support has been breached but on friday, it managed to climb back to land on the gap down.

Straits Times Index:


For the Dow Jones, it has broken it's resistance level which was acting as a support previously. The channel seems to be forming a rising bearish wedge and it remains to be seen whether it will break out from the downside or from the upside.

Dow Jones Industrial Average:


I am tilting towards bullishness in the short term though i am still bearish on the long term. A higher low and high has been formed for the Dow Jones and a higher low was been formed for the STI. Furthermore, it seems all news has been discounted into the price action already and this is perhaps the recovery phase but I believe the market cannot recover back to it's previous high.

Ferrochina has been good for shorting since the testing of the gap at $1.46 has failed and the result is that this counter is plunging downwards. This price action of this counter is very regular and it might be worth taking another look.

Ferrochina: