Winchart Technical Analysis -
Daily Market analysis
On Friday, the 2nd board index ended higher to close at 113.45 points, up 1.10 point. As shown on the chart above, the 2nd board index breakout successfully from the 111.92 resistance, and therefore, the 111.92 level is now serving as the support level. Meanwhile, as indicated by A, the 14, 21, 31 EMA is still serving as the dynamic support to the 2nd board index, and provided that th 2nd board index is still staying above the rising dynamic support, the outlook is bullish biased. Nevertheless, the next importance resistance level for the 2nd board index is at 115.37 WinChart Automatic Fibonacci Retracement. (Study A)
As indicated by B, volume for the 2nd board market increased significantly on Friday, up 130.8%. This suggests an increase in the market participation, and therefore, provided that the volume could remain above the 40-day VMA level, it should support the uptrend of the 2nd board index to test the next resistance level at 115.37 points. (Study B)
As circled at C, the Stochastic is now staying at above the 90% level, which is the short term over-bought region. This suggests that the 2nd board index was indeed bullish, but has gone over-heated. Therefore, should the Stochastic falls below the 90% level, it would be a signal suggesting a beginning of the short term technical correction. However, if the Stochastic should remains above the 70% level after the technical correction, the market movement for the short term shall remains bullish biased. (Study C)
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