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Sunday, September 19, 2010

Stock Index Chart Patterns - FTSE 100, CAC 40, Oslo (OSEAX) – Sep 17, '10

FTSE 100 Index Chart

FTSE_Sep1710

The FTSE 100 index chart pattern had promised much a week ago, but delivered little. The index closed at its highest level of 5567 on Tue. Sep 14 ‘10 and touched an intra-day high of 5613 on Fri. Sep 17 ‘10, but ended the week at 5508 – just 7 points higher on a weekly basis.

Bears will be delighted to note that Friday’s trading formed a ‘reversal day’ pattern on the highest volumes since Jul 27 ‘10 (volume bar not updated in chart above). The bull rally has stalled for the time being.

The bulls have taken a strong punch but still very much on their feet. The FTSE 100 is technically in a bull market. The 20 day and 50 day EMAs are both rising above the 200 day EMA. The bullish pattern of higher tops and higher bottoms since the Jul 1 ‘10 low of 4790, is in tact.

The slow stochastic is in overbought territory but showing a little weakness. The MACD is positive and above the signal line but has stopped rising. The RSI is in overbought zone – where it usually doesn’t stay long. The ROC is positive but dropping fast.

The index may correct down to the 20 day or 50 day EMAs. Wait for support at either moving average before buying the dip. In case the index drops below the previous low of 5071 made on Aug 25 ‘10 – however unlikely the prospect may appear – the bears will start calling the shots.

CAC 40 Index Chart

CAC_Sep1710

The CAC 40 index chart pattern shows quite a remarkable change since I analysed it three weeks ago. The index gained almost 300 points (more than 8%) and ventured into bull territory, but failed to make a higher top.

Friday’s ‘reversal day’ pattern (higher high, lower close) on very strong volumes, not seen since May 21 ‘10, took the index down to a close of 3722 – 4 points lower on a weekly basis.

The rising 20 and 50 day EMAs are below the 200 day EMA. Technically, the CAC 40 remains in a bear market. The technical indicators have not turned bearish, but are looking weaker.

The slow stochastic is in the overbought zone. The RSI has started to slide and slipped out of the the overbought zone. The MACD is positive and above the signal line, but has stopped rising. The ROC is falling rapidly in positive territory.

The bulls need to regroup quickly to stop the CAC 40 from dropping below the 200 day EMA. The technical indicators are not holding out too much hope.

Oslo (Norway) All Shares index chart 

Oslo (OSEAX)_Sep1710

The 5 months long bull market correction in the Oslo (Norway) All Share index chart pattern may be coming to an end. The index appears to be forming a bullish ascending triangle pattern and should break out upwards - beyond the 420 level.

The Oslo index and its 20 day and 50 day EMAs are rising above the 200 day EMA. The technical indicators are looking bullish. The slow stochastic is in the overbought zone. The MACD is above the signal line and rising in positive territory. The RSI is just below the edge of the overbought zone. Only the ROC is looking a bit weak.

Bottomline? The chart patterns of the FTSE 100 and Oslo (Norway) All Share indices are looking bullish. The CAC 40 is looking bearish. The Eurozone economies are not out of the woods. Caution should be the watchword. Stock picking skills will be tested. This may be a good time to diversify into emerging market funds/ETFs.

2 comments:

Forecasting Markets said...

Markets may pull back till 5400 and surge again, be cautious with your longs and buy only when markets pull back. Markets have to break 4700 decisively in September itself, else NIFTY can reach 6536 in next 3 months before crash ensues

Subhankar said...

Thanks for your comments.

Next time, please give reasons why you think the Nifty will fall to 4700 in September or rise to 6536 in 3 months. Otherwise, these remain just random statements.