04 August 2008

Technical Analysis - August 04 2008


S&P500 (1,260, last week 1,258 or +0.16% w.o.w)

The daily charts; especially the MACD continues to improve during last week albeit slower. The daily DMI(+ and -) has not shown any positive crossover yet and in fact they move further apart. The weekly charts although improved are still a long way off from a positive uptrend. The index is likely to trade between 1,232 and 1,330. Major resistance is seen at 1,280 as it tries to stay above the newly created 2nd level uptrend channel line. (refer charts above)

KLSE CI (1,159, last week 1,142 or +1.5% w.ow)

The daily MACD continues to remain on the uptrend and the DMI (+ and -) has just turned positive yet. The daily stochastic indicator shows that it may have a technical correction in this week. The weekly charts have shown some improvement but nothing concrete just yet.The index is expected to trade between 1,120 and 1,190. Strong support is seen at 1,142.

HangSeng (22,863, last week 22,741 or +0.5% w.o.w )

The daily charts especially the MACD continues to improve while the daily DMI (+ and -) has also shown a slight mix of positive/negative crossover during last week (indicating a very volatile week). The weekly indicators have not turned positive yet but it have since shown a slight hook up and improving. Immediate support is at 21,900 while resistance at 23,500.

Nikkei 225 (13,095, last week 13.335 or -1.8% w.ow)

The daily MACD chart is still positive albeit weaker while DMI(+ and -) did not maintain a positive crossover as they break away from each other during last week. As a result of the weakening daily indicators, the weekly MACD is now at the crucial stage of hooking down. The weekly MACD has been on a positive crossover since April this year. Short term players may be cautious this week and may leave the market if the daily indicators deteriorate further. The index is expected to trade between 12,500 to 14,000. 13,500 is a tough resistance to break but if it is broken, the chart will be on an uptrend again.

* CNBC: South Korea's foreign exchange reserve fell by a record amount in July as Authorities have sold about USD15b to prop up the won.(The reserves for July USD247.52b, June USD258.10b) South Korea's reserve is ranked 6th in the world after China, Japan, Russia, India and Taiwan.
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* Write-off No 1: Perwaja Holdings Bhd will write-off RM550m accumulated losses via capital reduction towards the year end by reducing its paid up capital from RM1.22b to RM787.78m. According to Perwaja's MD: "It is a cosmetic change. Potential investors can rest assured they are not buying into Perwaja's accumulated losses, the NTA is clean". Perwaja' shares will be listed on the 20th this month at and IPO price of RM2.90 per piece. According to Aseam Bankers(refer here), Perwaja's fair value is RM4.50! So good ah?
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* Write-off N0 2: TheEdge-Axis may have to write-off RM161m as auditors could not find enough evidence on the recoverability of amount owed by its contract manufactures and others mainly from Vietnam and Cambodia.

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