Cause for Concern

April 22, 2010 § Leave a comment

Shanghai Composite Index 22nd April 2010

The above chart shows the Shanghai Composite Index.

At the start of the week, it plunged 4.8%, breaking the medium term uptrend.

The following day, it tested the major support line of 2938, but failed to breach.

This is partly due to the fact that the stochastics is touching the oversold region.

The break of the equilateral triangle consolidation pattern is a big concern, as it is a big consolidation pattern spanning 9 long months.

This is a bearish signal.

The support line of 2938 will serve as the last line of defence.

The index could start to rise from overselling.

This leg of recovery will be very important.

If the index could not regain to levels above the uptrend line quickly, it is highly likely that the Shanghai Composite Index could be in for a downtrend.

Since China market is now seen as a leading indicator of global market health, such bearishness may have a spill over effect to other regions.

Parkway Touching Base

April 14, 2010 § Leave a comment

Parkway 14th April 2010

Parkway is being squeezed by the resistance level of $3.3 and the uptrend line, along with diminishing volume.

This is a bullish flag formation, and a breakout is likely to occur soon.

Stochastic is already in oversold region.

This is one of the rare counters that are relatively low risk to enter in the current bullish market.

Keep stop loss at $3.2

Raffles Education, Make It or Break It

April 14, 2010 § Leave a comment

Raffles Education 14th April 2010

After several false breakouts for the past few months, Raffles Education is now in a do or die situation (from a technical viewpoint).

Bearish technical factors:

1. Resistance at 39 cents.

2. The downtrend has established 3 to 4 credible peaks to serve as a very strong downtrend. Downtrend line has fallen below the resistance level, adding further deterence to its rise.

3.  50 days moving average has also fallen past the resistance level.

Possible bullish factors:

1. A support level at 36 cents have been established.

2. Signs of significant increase in volumes on up days.

3. The 2 troughs formed this year served as a short term uptrend line.

The 2 opposing trendlines are converging, which means a breakout is imminent (can be up or down).

Stochastics are currently rising, but need further confirmation from price movement to push it further up.

A failure to breach 39 cents will cause this counter to fall further, at a greater pace.

Keep a strict stop loss at 35.5 cents.

China Aviation Oil Back in Action

April 3, 2010 § Leave a comment

China Aviation Oil 1st April 2010

The highly anticipated rise of this counter has finally arrived.

After various share buyback for several months, this counter has suddenly come to live.

1. Extremely high volume

2. Broke resistance of $1.26 easily

3. Stochastic still not in overbought region

4. Uptrend is still in its infancy stage.

All these factors are good opportunities to enter early into the counter with a stop loss at $1.25

Summer is the Season of Oil

April 2, 2010 § Leave a comment

Oil 1st April 2010

Summer, as usual, will drive oil prices up, though a bit earlier for this year.

Despite most commodities are moving sideways for the past 3 months, oil has been finding strength since February with a steady rise.

Prices broke above $82 resistance a few days back.

Stochastic has just hit overbought region, and on an uptrend, this could likely mean accelerated increase.

STI New High, Hardly an April Fool’s Joke

April 2, 2010 § Leave a comment

STI 1st April 2010

STI closed above 2940 for the first time since Aug 2008.

The break did not come easy after several failure tests.

The plunge of 45 points on 31st March 2010 should lend further weight to the rally as shortist cover their shorts.

Coupled with global market’s rally, it is highly unlikely that the index will fall below the new established support of 2930.

Stochastic has yet to hit overbought region, implying that the rally could be in for an extended run.

Entering the market come Monday should be relatively low risk.

Lastly, GMMA still shows STI is trending at a healthy pace.

Cut loss if STI falls below 2930.

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