Global Market Outlook For Week Beginning 9th November 2009
Straits Times Index(STI) was well supported at the 2600 level, indicated by the uptrend line drawn. It should be retesting the stubborn 2746 resistance level after piercing through the 2700 once again. If 2746 can be broken successfully, the forward momentum should bring STI towards the 3000 mark before the end of the year.
After breaking out from the 2600-3000 consolidation range, Shanghai Stock Exchange(SSE) is now trading within the uptrend channel shown. Technically, it should be testing the 3478 ceiling, based on the upside target projection. Now, SSE is the leading indicator for global stock markets, taking over the leadership baton from the U.S. market.
Hang Seng Index(HSI) will soon be testing the 22,620 resistance level, attained on 23th October. If this barrier can be penetrated with the help of positive move from SSE, HSI will have the potential to reach the 23,368 level before the close of 2009.
Jakarta Composite Index(JCI) fell off the cliff and experienced a 13% decline within 2 trading weeks. The 2271 support level succeeded in cushioning the drop and JCI has since rebounded from that level. If it can push through the 2259 resistance level, the next ceiling for JCI will be the 2774 region. But if it fails to do so, there lies the danger of the formation of a Head-and-Shoulders chart pattern. If the 2271 were to be penetrated later on, JCI can be expected to experience further weakness.
Bombay Stock Exchange(BSE) SENSEX is also one of the best performing market in Asia, together with SSE, HSI and JCI, after registering a whopping 117% rally from the early March low!! After hitting the high of 17,493 region on 17th October, it plummeted 14% before it found some footing at the 15,600 support level. If it has the strength to break the ceiling of 17,493 level, the next overhead resistance will be at the 17,736 mark. 15,600 will provide the necessary underlying support, but if it were to be broken, we may see SENSEX decline to the 14,700 region.
Kuala Lumpur Composite Index(KLCI) seems to be enjoying a pretty good bull rally, bouncing along the uptrend line obediently. If it continues to perform accordingly, its next 2 resistance levels will be at 1276 and 1305 respectively. 1231 should act as a good support level to prevent any further decline.
S&P 500 rebounded from the 1019 support region, staged a powerful run-up and is now preparing to test the 21st October high of 1101. The next target for S&P 500 will be 1168 if it can penetrate this 1101 level successfully.
If NASDAQ can punch through the 2190 resistance level, it will complete a Double Bottom chart pattern, which will propel it to hit the next target of 2318. At this point of time, 2040 looks like a good support for NASDAQ to repel any further weakness.
Dow Jones has remarkably penetrated the 10,000 full number mark! But the worrying thing is that this was achieved with declining volume, as illustrated by the volume bars at the bottom of the chart. This shows a lack of institutional buying. Technically, it has the potential to hit 10,683 objective while its downside will be supported at the 9,630 level.
Will there be a Christmas Rally this year?? I definitely hope so! Let’s all party and enjoy while the going is good. Some green shoots are slowly turning into yellow weeds, eg. U.S. unemployment rate in October was a staggering 10.2%, 120th bank have been closed down since the start of 2009 in U.S….etc. Will 2010 Tiger Year turn out to be a good year for the global stock markets? Personally, I doubt so. Nevertheless, let’s all enjoy this rally as much as possible before more ugly events start to appear next year.
Cheers 
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Global Market Outlook For Week Beginning 26th October 2009
The 2700 resistance level has FINALLY been broken after as many as 5 attempts for STI. The magic number now is 2746. A successful breaching of 2746 will fuel STI with the necessary momentum to charge towards the 3000 mark before the close of 2009.
Shanghai Stock Exchange (SSE) seems to have broken out from the consolidation range of between 2600 and 3000. Based on the upside target projection, the next resistance will be around the early August high of 3478.
Coupled with the upward momentum of SSE, Hang Seng Index (HSI) charged through the high of 21,930 attained on 17thSept 2009 impressively. Going forwards, HSI should have enough strength to trend up towards the next ceiling of 23,300.
Kuala Lumpur Composite Index (KLCI) has rallied 52% from the low of 838 since early March this year. The next 2 resistance levels will be at 1276 and 1305 respectively. The immediate support for KLCI is at the 1241 level.
Jakarta Composite Index (JCI) has experienced a tremendous run-up of 106% since the low of 1244 attained in early March this year, making it one of the best performing market in Asia together with SSE and HSI!! The next ceiling for JCI will be much higher at 2774, provided that it can bulldozed through the high of 2559 achieved on 7th October 2009. It may retreat to the 2411 level if it were to experience any weakness or profit-taking.
In U.S., S&P 500 has been trading within a tight range after breaching the 1080 resistance level. Its immediate support will be at 1039 if it fails to trend higher. However, it may have a chance to touch 1168 if it can gather enough strength to rally from the current trading range.
NASDAQ has a half-hearted penetration of the 2167 level, after which it has been tiptoeing around this level for the past fortnights. It’s next resistance level will be at 2319 while 2040 will be its immediate support.
Dow Jones has been flirting with the magicial 10,000 level for the last 2 weeks as well. It may retreat to the 9630 support level. Technically, it has the potential to hit 10,642 if it can pull away from the 10,000 level successfully.
Personally, I am not particularly worried that the stock markets will have a drastic decline before we draw the curtain for 2009. I believe the party can still carry on because of the aggressive stimulus plans, bailouts, low global interest rates…etc. So let’s all enjoy the music, wine and food while the party is still on, but with the caution that we may have a significant correction next year at the back of our mind. If you guys think that this ugly Great Recession is already over, I urge you to think again seriously………
Cheers
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
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