Technical Analysis - May 5, 2008

S&P500 Chart (1,414)


The daily charts are looking good and trending upwards. For weekly charts, MACD has a positive cross over and it has now improved to -19 and MACD Hist is positive. The DMI (+ & -) needs to hook up first to see a more concrete uptrend but the ADX seems to weakens a little (ie from 27 to 26 a week ago). There is a possibility that the index may have some profit taking soon as weekly stochastic shows a high 97. The daily RSI is 60 while weekly is 50; ie still inexpensive. The index is expected to trade between 1,380 and 1,450.


KLSE CI (1,271)


The daily charts are generally positive and but has deteriorated. The daily MACD is still moving upward albeit slower. The daily DMI (+ & -) has a positive hook up but is weakening while the ADX is getting weaker(now 20). Weekly indicators are still showing downward pressure.To make matters worse, the weekly stochastic shows a reading of 90- ie profit taking setting in. The index has to make sure it stays above the 1,270 to avoid falling out of the uptrend channel created since March this year. The index is expected to trade between 1,230 and 1,314.


HangSeng (26,241)


The daily charts are positive. The weekly DMI (+ & -) has a positive hook up and the ADX is at 21 (ie ranging trend). Any ADX from 25-40 will denote a strong trend. The MACD has crossed positively over at -190 from -400 a week ago and MACD Hist is also positive. However, there may be profit taking as the weekly stochastic oscillators is now at 95. Immediate supports are 25,500 and 25,000 while resistance is at 27,000.


Nikkei 225 (14,049)


The daily charts are looking good and trending upwards. For weekly charts, MACD has just turned positive at -500 and the MACD Hist is positive. The DMI (+ & -) are improving but no cross over yet. The ADX has weakened (ie 30) but still indicating the strong trend is still intact. Weekly stochastic is in an uncomfortable situation of 100- profit taking is imminent. Resistance is seen as 14,400 while immediate supports at 13,450 and 12,900.



* JP Morgan's latest year end market estimates are as follows: KLCI-1,500, HS China Enterprise-18,500, Sensex-22,500, HangSeng-35,000, Philippines 3,400, Kospi-1,970, Jakarta-12,800, Singapore-3,800, Australia-5,900, Taiwan-11,000, Pakistan-16,500 and Thailand-970. For information, Citi's estimates for KLCI is 1,449 and CLSA's is 1,150- please refer to my previous postings Citi here and CLSA here.