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Friday, September 10, 2010

Stock Index Chart Patterns – Singapore Straits Times, Australia All Ordinaries, New Zealand NZX50 – Sep 10, ‘10

Straits Times (Singapore) index chart

Straits Times_Sep1010

The Singapore Straits Times index chart pattern had dropped from the Aug 3 ‘10 top of 3043 and sought support at the 50 day EMA, when I analysed it a month back. The technical indicators were looking weak and the correction in a bull market was expected to last a little longer.

It was more of a sideways consolidation between the 20 day and 50 day EMAs during the rest of Aug ‘10, followed by a bullish cup-and-handle pattern. All three EMAs are rising with the index above them, and the bulls are back in control.

The technical indicators are looking bullish. The slow stochastic is in the overbought zone. The MACD is positive and rising above the signal line. The ROC is positive and rising. The RSI is above the 50% level but dropped after reaching its overbought zone.

Australia All Ordinaries index chart

Australia_Sep1010

The Australia All Ordinaries index chart pattern has been consolidating sideways for the past four months after it dropped below the 200 day EMA. Periodic forays above the 200 day EMA and the 4600 level has been immediately resisted by the bears.

The chart pattern in Sep ‘10 is giving hopes of a longer spell above the long-term moving average. The 20 day EMA has crossed above the 50 day EMA and trying to move above the 200 day EMA. That will be the first confirmation that bulls are regaining control. The index closed the week exactly at the 4600 level.

The technical indicators are looking bullish but displaying negative divergences. The index went past its Aug ‘10 high of 4619 when it touched an intra-day high of 4630 on Sep 7 ‘10. But the technical indicators made flat or lower tops.

The slow stochastic is in the overbought zone. The MACD is positive and above the signal line. The ROC is positive and rising. The RSI is above the 50% level but drifting down. The index made a higher bottom in Aug ‘10 than the one made in Jul ‘10. But the bulls should remain circumspect till the May ‘10 high of 4680 is crossed.

New Zealand NZX50 index chart

NZX50_Sep1010

The New Zealand NZX50 index chart pattern was struggling in a much stronger bear grip, but has emerged above the 200 day EMA for the first time in four months more confidently than the Australian index.

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 ROC is positive, and interestingly, has made a higher top than the one it made in Apr ‘10 when the NZX50 was much higher. A positive divergence. The RSI has dipped slightly after reaching its overbought zone.

Bottomline? The Singapore Straits Times index chart pattern is in a bull market after a short period of correction. Buy the dips. The Australia All Ordinaries and New Zealand NZX50 index chart patterns are emerging from bear grips but awaiting bull market confirmations (20 day and 50 day EMAs moving above the 200 day EMAs). Buy selectively with strict stop-losses in place.

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