Analyst Reports 20: Point of Reckoning

By Paul on April 16th, 2009

: Image by bass_nroll via Flickr

As a follow-up to my 2 last posts, I’ve decided to do some charting today because it does seem that we have reached a point of reckoning for most markets.

It’s amazing to see STI keep climbing up without Respite and Despite negative news. Even on recent Tuesday, STI closed up higher by 1.08% even with a bad news of the economy contracting more than the previous estimate. Bully the Bear also mentioned this in his recent post with interesting chart and market psychology analysis too.

Speculators are rotating in and out of sectors again. I had my suspicion when penny stocks have started moving. In particular, Yongnam in my portfolio, jumped after a contract announcement with several other construction plays following. Feels good to see a fellow chartist having the same sentiment.

My personal opinion is that there is a medium-to-high possibility of reversal for most markets in the next few days. I’m eying DJI, SSE and STI as charted below.

STI is toying with the resistance line as fulfilled in my last Analysis Report post.
SSE is also at the same crucial point as mentioned in my previous post on SSE Watch. You might be interested to chart some movers in china stocks. You might see most of them are hovering near some resistance too.
DJI just touched the top resistance of a slightly downward sloping band. I believe it is in the process of a reversal now.

But yet, I am not doing any buying or selling yet because you’d never know any whipsaws and stuff might happen. I’m willing to see my target markets drop by 5% before selling just to have that confirmation of a reversal to buy at a lower price.

Just for interest sake on how TA can be amazing sometimes. SIA dropped for the past 4 days despite STI moving up significantly. It can puzzle many investors why this can happen. But looking at the chart makes you understand such movements in a better light. Basically, SIA has hit the resistance for a 2nd time, confirming its strength. At the same time, it is also near a critical point above the short term uptrending line. Any break above or below will make way for a significant move. Looking at the macro level (even asI don’t want this to happen), I only have a bad feeling on SIA’s short term price movement direction. But again, look at confirmation signs first and decide on risk-reward before doing anything.

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