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Friday, January 8, 2010

Stock Index Chart Patterns - Shanghai Composite, Hang Seng, Singapore Straits Times - Jan 08, '10

Shanghai Composite index chart


The Shanghai Composite chart shows that the bulls continued to struggle as the bears wrested back the initiative during the first week of 2010. The index dropped below the 20 day EMA and got support from the 50 day EMA - showing short-term weakness.

More importantly, the bearish pattern of lower tops and bottoms continued as the high of 3296 on Jan 6 '10 was lower than the Dec 7 '09 high of 3334.

The slow stochastic has turned down and the %K line is about to cross below the %D. The MACD is barely positive and above the signal line. The ROC has moved into the positive zone, but the RSI has slipped below the 50% level.

Hang Seng index chart


The bulls were not as much on the back foot, as the Hang Seng  chart seems to suggest. The index moved above the converging 20 day and 50 day EMAs on decent volumes till the bears halted the rise  short of the Dec '09 high of 22594.

The slow stochastic has moved up to the overbought zone. The MACD is marginally inside the positive zone and above the signal line. The ROC is well inside positive territory. The RSI has moved above the 50% level.

The high of 23100 made in Nov '09 remains the big barrier that the bulls need to cross before they can shake off the bears.

Straits Times (Singapore) index

Straits Times_Jan0810

The bullishness in the Straits Times chart continues unabated with the Singapore index making a new high of 2945 on Jan 7 '10. All three EMAs are moving up smartly and the index is well above them.

The slow stochastic has remained inside the overbought zone for a month, except for a brief dip. The MACD is positive and above the signal line. The ROC is in positive territory. The RSI is in the overbought zone.

The bears need not lose heart. There are negative divergences in the technical indicators. A correction could be in the offing.

Bottomline? The index chart patterns of the Shanghai Composite and the Hang Seng are in the midst of a tussle for supremacy between the bulls and bears. The Straits Times index is showing a clear bullish trend. Stay invested, but keep tight stop-losses.

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