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Friday, April 3, 2009

TSEC (Taiwan) Chart Pattern - Apr 3, 2009

Last week, we had taken a look at the Hang Seng chart pattern, and it looked quite similar to the Sensex chart pattern. The Taiwan index chart pattern gives quite a different view.

Let us have a look at the TSEC 6 months closing chart pattern:-

Taiwan_Apr 0309

(Please right-click on the image above and open it in a new tab or window for a better view.)

After a sharp fall like most global indices, the TSEC jumped off its 52 week low in late Oct '08, but went down to a new 52 week low in Nov '08. It moved into a sideways consolidation for the next three months.

In the Mar '09 rally - in tandem with global markets - it has not only pulled out of the consolidation phase, but has made a clear 'rounding bottom' chart pattern on significantly higher volumes.

The TSEC has moved above the 20 day EMA and the 50 day EMA - both of which are moving up. This is a clear bullish sign. It is tantalisingly poised below the trend deciding 200 day EMA. My guess is that the 200 day EMA won't be able to stop the up move.

Why? Other than the EMAs and volume confirmation, the MACD, ROC and RSI are also showing bullish patterns. The slow stochastics is in the over bought zone, but a market can stay over bought for quite some time during a bull phase.

Bottomline? The TSEC chart pattern is clearly showing a trend change from bear market to bull market. A harbinger of what is to follow in the global markets?

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