Winchart Technical Analysis -
Daily Market analysis
On Wednesday, the 2nd board index continued its technical correction, closing 1.59 points lower to 108.59 points. At the moment, the 2nd board index is testing the 108.75 support level, as well as the 14, 21, 31 EMA dynamic support. The support at the 14, 21, 31 EMA is crucial for if the 2nd board index should rebound successfully from the rising dynamic support, the uptrend is likely to continue. Other wise, if the 2nd board index should fall below the 14, 21, 31 EMA, the next support level would be at the 104.6 level. (Study A)
Volume for the 2nd board market on Wednesday slide another 14% with the volume staying below the 40-day VMA level. The decrease of volume during a correction is usually normal, but if the 2nd board index should resume to its uptrend, we must have a significant increase of the volume and the volume must stay above the 40-day VMA level in order to sustain the bullish sentiment. (Study B)
As circled at C, the Stochastic %K line is now at the neutral region. If the %D line should fall below the 70% level, it would confirm the %K line and the Stochastic signal would be at neutral. (Study C)
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