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Sunday, September 26, 2010

Stock Index Chart Patterns – Singapore Straits Times, Australia All Ordinaries, New Zealand NZX50 – Sep 24, ‘10

Straits Times (Singapore) index chart

Straits Times_Sep2410

Two weeks back, the Singapore Straits Times index had completed a bullish cup-and-handle pattern. The technical indicators were also bullish. It is no great surprise that the index has moved up steadily, and all three EMAs are also rising in tandem. The bulls are in total control.

The Straits Times index touched a 52 week high of 3116 on Sep 22, ‘10 and closed the week a little below the 3100 mark – gaining 70 points (2.3%) in two weeks.

The ROC and RSI are showing negative divergences – drifting down while the index moved up to touch the new high. The MACD is above the signal line and rising in positive territory, but failed to reach a new high – also a negative divergence. The slow stochastic is in the overbought zone, but has moved down. 

A bit of profit booking can be expected near a 52 week high. Any dip towards the rising 20 day EMA can be used to buy.

Australia All Ordinaries index chart

Australia_Sep2410

The Australia All Ordinaries index reached and went past an important milestone – the May ‘10 top of 4680 mentioned two weeks back. The index moved slightly higher to touch 4692 on Sep 17, ‘10 and closed at 4685 – its highest closing level in 4 months.

As often happens near a previous top, profit booking sent the index sliding downwards. The week’s closing level of 4651 meant a gain of about 50 points (1.1%) in two weeks.

The 20 day EMA has crossed above the 200 day EMA, and the 50 day EMA is about to do the same – heralding the bullish resurgence. The technical indicators are still bullish, but last week’s profit taking has taken its toll.

The slow stochastic is about to drop below the overbought zone. The MACD is positive and above the signal line, but slipping. The ROC has dropped towards the ‘0’ level. The RSI is above the 50% level, but falling after touching the overbought zone.

The Australia All Ordinaries index has made a bullish ‘higher tops and higher bottoms’ pattern. Use dips to add, but maintain a tight stop-loss.

New Zealand NZX50 index chart

NZX50_Sep2410

The New Zealand NZX50 index chart has made a bullish rounding-bottom pattern and is getting ready to test the Apr ‘10 top of 3349. Both the 20 day and 50 day EMAs have crossed above the 200 day EMA.

The index touched a high of 3253 on Sep 21, ‘10 and closed the week at 3211 – a gain of 50 points (1.6%) in two weeks. The rise above the 200 day EMA has been a little too steep. The ROC is showing negative divergence. The slow stochastic and RSI are both in their overbought zones, but drifting down.

The MACD is positive and above the signal line. It has reached a higher top than the one it touched in Apr ‘10, when the index was higher. This is a positive divergence. A further drop in the NZX50 index can be a buying opportunity.

Bottomline? The Asia Pacific index chart patterns are back in bull markets. Buy the dips, but maintain trailing stop-losses.

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