Technical Analysis - July 14 2008

S&P500 (1,239, last week 1,263 or -1.9% w.o.w)

The daily/weekly charts continue to weaken. The weekly stochastics and RSI indicate a possibility that the index may stage a technical rebound during the week. The index may find support at 1,220 and 1,170 while the resistance is at 1,280 and 1,300.

KLSE CI (1,150, last week 1,134 or +1.4% w.ow)

The daily charts is trying to break away from the usual weakness as evident by its MACD movement. Daily MACD is staging a rebound and it will be evident in the coming days whether the index will be strong to hold the selling pressure at bay while forming some bases at 1,120-1,130. Meanwhile, weekly charts continue to weaken. The index has been successful to maintain above the 200-day ema of 1,115. The index is expected to trade between 1,050 and 1,190.

HangSeng (22,185, last week 21,424 or +3.6% w.o.w )

The daily charts is trying to break away from the usual weakness as evident by its MACD movement. Daily MACD is staging a rebound and it has made a positive crossover last week. The Daily MACD Hist has also just turned positive. It will be evident in the coming days whether the index will be strong to hold the selling pressure. Meanwhile, weekly charts continue to weaken. Throughout last week, the index worked very hard to stay above the dreadful 21,500 ie the minimum level required to stay within the long term major uptrend support line since 2004. Immediate support is at 21,000 and 20,500 while resistance is at 23,500.

Nikkei 225 (13,040, last week 13,238 or -1.5% w.ow)

The daily charts have weakened further. For weekly charts, the MACD is still in a positive crossover but started to hook downwards further to -257(last week -219). The weekly MACD Hist is still positive. The index has dropped off from the current short term uptrend line. The weakening of daily/weekly indicators would pressure the index to trade between 12,500 to 13,800.


* The opposition walks out of Parliament after the non confidence motion was rejected today due to the motion "wrongly worded." Meanwhile, as warned yesterday, many of my office collegues were late to work today. For a general feel of how hugh the traffic gridlock was, imagine a normal drive from Bandar Sungai Long to KLCC of under 40 mins now takes almost 3 hours. Thank you Syed Hamid Albar for your concern of our safety!

* The Edge: Nazir of CIMB disagrees with his brother's comments that international investor confidence is not swayed by the current cloudy political outlook.

* The US Treasury and Federal Reserve on Sunday have offered a massive aid to Fannie and Freddie (both plummented >40% last week) to bolster confidence in the mortgage firm giants and head off a potential or systematic collapse in the financial markets. Asian markets seem unconvinced! Will the European and the US markets rally tonight? or fall further?

* Footsie has joined the world's leading markets to enter bear market territory amid fresh concerns to credit crisis entering a new phase and a record high for oil prices. The index FTSE 100 closed 5,261.6 last Friday or 22% below its peak.

* For information. CNN: 13b plastic bags were issued to shoppers every year- 220 bags per person. Average usage per bag is only 12 minutes but will remained in the environment for thousand of years.

* Ms Venezuela, Dayana Mendoza, 22 years old, was crowned Miss Universe 2008 today. This lady stands at 176cm with green eyes was once kidnapped in her home country and says the experience taught her to remain poised under pressure. Last year's winner was from Japan.