A Look At the Big Picture - DJIA: Overbought indicators seems to suggest that the bull is going to take a break, hitting trendline resistance. However, the uptrend seems to be intact (+ve DI). The bearish divergence 2 weeks ago seemed to have dissipated with volume coming in over the last 1 week. DJIA will probably test the 20MA support (7870) this week. If it is able to hold the support line, the bull will continue to charge again. If DJIA is able to break above Friday's close, it will be a positive indication of a continuing uptrend. Otherwise, watch out for 20MA support. If this breaks down, we will perhaps see a retracment to 7500 level.
STI: STI also needs a break. Indicators shows that STI is highly overbought. However, a clear uptrend (+DI and rising ADX) is developing. This is perhaps fuelled by the Shanghai and Hong Kong market. But there are strong headwinds
ahead. The resistance at 1950 seems to be a strong one. Beyond 1950, there is a 60 points gap as well as the 200MA resistance that needs to be broken. A retracement towards the 20MA support line (1830) will be a healthy sign to give the STI the energy to charge ahead. The uptrend is still intact as long as the 20MA support hold. Otherwise, we'll expect the correction to test 1700 level.
My Stock Pick from Indicators Watch:
Nil from Indicator watch.
Disclaimer: My assessment of STI is for fun reading only. It is not an inducement to buy or sell nor an investment advice. By reading this blog, you have agreed that I shall not be responsible for any profits or losses based on the information provided.
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