Price is still on a short term downtrend with what we believe still a longer term uptrend. Short term downtrend is definitely not in question. Downtrend resumed after failing to hold 1524 support and is still in place as price is below moving average (chart 1) and the lower daily closes.
Unfortunately, the direction of longer term trend is still in question. There yet to be clear downtrend picture formed and therefore the prudent view is that prior trend, which is up, still in place. The aregument for the view are:
1) the 4 day rebound last week is considered too short to be an up-cycle. Therefore, the fall from 1580 is still considered a downmove within a cycle and so price is currently searching for bottom;
2) RSI too has only just reached oversold level, first time since May10;
3) Similarly, it’s the first selling spike since then and market breadth is not particularly weak; 4) 20 week moving average still points up; and
5) MYR is still on a downtrend and developed market uptrend still intact.
If so, rebound is expected and if it is to occur soon, the first signal would be a close above 1500 level. Thereafter, the strength of rebound is to be assessed and anything above 61.2% retracement level will be in support for the bull. Anything below that and a break of the eventual bottom should mark the beginning of downtrend.
Another thing, Dec- Jan rally is fully retraced and price is probably correcting a larger cycle. If it is correcting May-Jan rally, the correction so far is only the tip of iceberg as anything between 1445 to 1370 (38% t0 62% retracement level) is considered an acceptable correction for an uptrend.
View the full report here http://www.osk188.com/Dindex.jsp.
No comments:
Post a Comment