Technical Analysis - July 7 2008

S&P500 (1,263, last week 1,278 or -1.1% w.o.w)

The daily/weekly charts continue to weaken. The weekly stochastics and RSI indicate a possibility that the index may stage a rebound during the week. The index is now below the 200-day ema and 1,280 ie the minimum level required to stay within the long term major uptrend support line since 2003. Major headwind ahead. The index may find support at 1,250 and 1,220 while the resistance is at 1,280 and 1,300.

KLSE CI (1,134, last week 1,191 or – 4.8% w.ow)

The daily/weekly charts continue to weaken. The weekly stochastics and RSI indicate a possibility that the index may stage a rebound during the week. The index has failed to keep afloat above 1,190 ie the minimum level required to stay within the long term major uptrend support line since 2004. It is also below the 200-day ema. Major headwind ahead. The index is expected to trade between 1,050 and 1,190.

HangSeng (21,424, last week 22,042 or -2.8% w.o.w )

The daily/weekly charts continue to weaken. The weekly stochastics indicate a possibility that the index may stage a rebound during the week. The index is slightly below 21,500 ie the minimum level required to stay within the long term major uptrend support line since 2004. However, it is still above the 200-day ema. The index needs to work hard this week to keep above the 21,500. Immediate support is at 21,000 and 20,500 while resistance is at 23,500. Major headwind ahead.

Nikkei 225 (13,238, last week 13,544 or -2.30% w.ow)

The daily charts have weakened further. For weekly charts, MACD is still in a positive crossover but started to bend downwards further to -219(last week -195). 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 12,900 to 13,800.

* BT Singapore: A Bloomberg study shows a whopping USD11.4T has been wiped out from the global equity markets so far this year-the weakest start to the year since 1970.

* Reuters: Japan foreign exchange reserves reached US1.002T at the end of June due to in part investment returns and the euro's rise against the USD that inflates the value of Euro-denominated bonds in the stockpile. Japan is the 2nd largest foreign reserves country in the world after China.

* Still on Japan- Net sell on Monday. Orders for Japaneses stocks showed there were sell orders of 26.8m shares and buy orders for 21.9m shares. As such the net sell is 4.9m shares.