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Friday, October 23, 2009

Stock Index Chart Patterns - Shanghai Composite, Hang Seng, Taiwan TSEC - Oct 23, '09

Shanghai Composite index chart


A nice little up trend in the Shanghai Composite chart took the index above the psychological resistance of the 3000 level to a new monthly high of 3123 today (Fri, Oct 23 '09).

The technical indicators, which were mildly bullish last week, are looking a lot stronger now. The 20 day EMA is trying to edge above the 50 day EMA, and both have started to move up.

The slow stochastic has entered the overbought zone. The RSI is about to do likewise. The ROC has moved up nicely. The MACD has moved into positive territory.

The bears tried their best to knock the index below the 200 day EMA, but the long term average provided strong support. Ride with the bulls.

Hang Seng index chart


Just a hint of a correction in the Hang Seng index mid-week was quickly snuffed out by the bulls. A new high of 22620 was made intra-day today. The brief correction earlier this month was well supported by the 50 day EMA.

All three EMAs are continuing their upward momentum. The slow stochastic stayed in the overbought zone right through the week. The RSI remained just below its overbought zone. A bit of a dip in the ROC should get rectified. The MACD remained positive and above the signal line.

The bulls are in full command.

Taiwan (TSEC) index chart


A new high of 7812 was made on Tue, Oct 20 '09 by the Taiwan TSEC chart after which the runaway bulls took a short breather. The index fell to the 20 day EMA, from where it bounced up today after receiving good support.

The slow stochastic has dipped below the overbought zone. The RSI is moving down but remains above the 50% level. The ROC has dropped towards the '0' line but remains above it. The MACD has fallen below the signal line but stayed in positive territory. The negative divergences in the RSI, ROC and MACD remain a concern.

Bottomline? The Shanghai Composite index chart seems to have shaken off the bear hug. The effect is quite visible on the Asian indices, where the bulls are back in control. Keep trailing stop-losses and enjoy the ride.

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