For those who find it hard to follow I suggest reading through my previous posting on how I am using technical indicators as a trend seeker. I have two posts detailing each indicator that is to be used in this weekly sharing.
Relative Strength Indicator (RSI)
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| Chart Setting: SMA 1, RSI (14, 20), Mar'10 to Sep'10 |
Last week we see investors trading at sidelines with gainers as much as losers at the end of the week. It still continues to this Monday. Nevertheless no swing test or divergence signal is expected for this week but investors holding back until the announced plans for Economic Transformation Plan (ETP) and Entry Point Projects (EPP) by the government this week.
Moving Average Convergence Divergence (MACD)
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| Chart Setting: EMA 12, EMA 26, MACD (26, 12, 9), Mar'10 to Sep'10 |
Mixed momentum as MACD line hovering above 20. KLCI still far from the centerline and thus crossover is not expected for this week. Same as RSI, investors are holding back for announcement by the government.
Resistance and Support Level
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| Chart Setting: Mar'10 to Sep'10 (6 months) |
New resistance now set at 1490-1500 points while support level is now at 1440-1420 points (as the previous high has been broken through higher).
In a Nutshell
Market could go higher if there is positive news from the key announcement by the government which will detail the Economic Transformation Programme (ETP) and the Entry Point Projects (EPPs). If the ETP and EPP were not up to expectations, there could be some pull back from investors because people react kindly to good news only during speculative times.
Besides the EPPs, the Performance Management and Delivery Unit (Pemandu) is also expected to reveal on September 21, 2010 the business opportunities available. There is also 2011 Budget on October 15, 2010, which may come up with more goodies but that is still a month away. Other positive impetus were the strengthening of the ringgit and the announcement of the Basel III guidelines for the banking sector.
I have been trying to say that the overall market is overvalued but conditions are still bullish, perhaps because there is not enough nor strong enough bad news to turn the market upside down just yet. I also realised that Asian markets are beginning to react at a lesser extent towards the market sentiments of the exchange markets in the US and European countries. This could be due to China's growing economy as a world powerhouse.
Besides the EPPs, the Performance Management and Delivery Unit (Pemandu) is also expected to reveal on September 21, 2010 the business opportunities available. There is also 2011 Budget on October 15, 2010, which may come up with more goodies but that is still a month away. Other positive impetus were the strengthening of the ringgit and the announcement of the Basel III guidelines for the banking sector.
I have been trying to say that the overall market is overvalued but conditions are still bullish, perhaps because there is not enough nor strong enough bad news to turn the market upside down just yet. I also realised that Asian markets are beginning to react at a lesser extent towards the market sentiments of the exchange markets in the US and European countries. This could be due to China's growing economy as a world powerhouse.
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| 5-Week Trend Chart *Tech indicators are lagging charts |
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