Technical Analysis - July 21 2008

S&P500 (1,261, last week 1,239 or -1.7% w.o.w)

The daily charts especially the MACD has improved and has shown a positive cross over during last week. Short term players may move into the market this week if the crossover continues even though the weekly MACD is still weakening. The index may find support at 1,200 and 1,170 while the resistance is at 1,280 and 1,300.

KLSE CI (1,105, last week 1,150 or -3.9% w.ow)

The daily MACD has not crossover yet due to persistent selling last week. Meanwhile, weekly charts continue to weaken. The index has failed to maintain above the 200-day ema of 1,115 and as such facing more selling pressure ahead. The index is expected to trade between 1,050 and 1,150.

HangSeng (21,874, last week 22,185 or -1.4% w.o.w )

The daily charts especially the MACD has improved and has shown a positive cross over during last week. Short term players may move into the market this week if the crossover continues even though weekly MACD is still weakening. Despite going below 21,000 the index managed 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
21,500 while resistance is at 23,500.

Nikkei 225 (12,804, last week 13,040 or -1.8% w.ow)

The daily charts have weakened further although there are signs of slowing the process. For weekly charts, the MACD is still in a positive crossover but started to hook downwards further to -300(last week -257). The weekly MACD Hist has just turned negative. 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 13,500. .


* Politics overkill? All major markets are up 2-3% at noon except Malaysia which is down 1.07%.
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* Bloomberg: Aussie dollar could be "on the cusp of a free fall" after reaching a 25 year high and near parity against its US counterparts due to possible rate cut, slower demand for commodities and economy going into recession.
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* Reuters: Vietnam raises gasoline prices by 31% today. The gasoline now retails at 19,000 dong or about RM3.70 per litre. Diesel and fuel oil were also raised by 14.3% and 36.8% respectively. Looks like Vietnam's inflationary problem has gone a few notches higher.
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* SinChew: Sabah's population has gone up by 4-fold from 1970-2005 (35 years) from 650,000 to 3.25m, whereas Sarawak's population has gone up by 1.3 fold from 1m to 2.3m. There are probably more Indonesians/Filipinos(now Malaysian) than Malaysian themselves. Why do we always have to be the "suckers"? We have to "thank" Dr M and the current government for their foresight. Bravo!