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Friday, March 23, 2012

Stock Index Chart Patterns – Jakarta Composite, Singapore Straits Times, Malaysia KLCI – Mar 23, ‘12

Two weeks ago, the chart patterns of the Jakarta Composite, Singapore Straits Times and Malaysia KLCI indices had entered bull markets but the bears hadn’t given up the fight completely. The situation hasn’t changed much since then. All three indices have not yet been able to overcome their overhead resistances.

Jakarta Composite Index Chart

Jakarta_Mar2312

The Jakarta Composite index is trading above all three of its rising EMAs and within the upward sloping channel. The bull market is alive and kicking. But the resistance from the 4030 level is proving to be quite strong.

The technical indicators are mildly bullish, but showing negative divergences. The MACD is positive and above its signal line. The ROC is positive and touching its 10 day MA. The RSI has dropped after touching the edge of its overbought zone. The slow stochastic has slipped down from its overbought zone.

Expect some sideways consolidation before the 4030 level gets breached. Buy the dips.

Singapore Straits Times Index Chart

Straits Times_Mar2312

The Singapore Straits Times index had bounced up from its rising 50 day EMA but failed to get past the 3030 level once again, and has dropped down to seek support from its 20 day EMA. Despite today’s high volume spurt, the index closed lower for the week.

The technical indicators are slightly bullish. The MACD is positive, but falling below its signal line. The ROC is also positive and touching its 10 day MA. The RSI is at its mid-point. The slow stochastic has dropped down from its overbought zone.

Expect the bears to put up a strong fight to defend the Aug ‘11 gap in the chart. As and when that gap gets filled, the bulls will be unstoppable.

Malaysia KLCI Index Chart

KLCI Malaysia_Mar2312

Negative divergences were observed in the technical indicators of the Malaysia KLCI index two weeks ago, but investors were advised against shorting a bull market. A correction down to the rising 20 day EMA provided another opportunity to enter.

The technical indicators are not showing much bullish strength. The MACD is positive but below its signal line. The ROC is just above its 10 day MA and barely positive. The RSI has slipped below its 50% level. The slow stochastic has climbed above its 50% level.

The Jul ‘11 top of 1597 needs to be breached before the bulls can resume complete dominance.

Bottomline? The Asian index charts are in bull markets, but the bears are putting up a stubborn fight. It is a question of when, not if, they will get vanquished. Add on dips, or hold on for the ride.

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