Winchart Technical Analysis -
Daily Market analysis
The 2nd board index retreated in the morning session, but ended higher at the closing with the last minutes gains and ended 0.69 of a point higher. As shown on the chart above, the 2nd board index is testing the 115.37 resistance level. The 115.37 level was the resistance of the Double Top in the 2nd of 2004 and January of 2005. Therefore, in order to break out from this resistance successfully, volume for the 2nd board market must increase significantly.
Nevertheless, as indicated by A, the 14, 21, 31 EMA is still serving as the dynamic support to the 2nd board index; and therefore, provided that the 2nd board index is still supported by the 14, 21, 31 dynamic support, the outlook remains positive biased.
Volume for the 2nd board market increased only 6.9%, and therefore, insignificant to confirm the break out of the 115.37 resistance. In short, volume must continue increase and remains above the 40-day VMA level to sustain the bullish sentiment. (Study B)
Until today, the Stochastic is still showing an over-bought signal, which suggested that the 2nd board index was indeed over-heated. Therefore, there is still a risk of a technical correction. However, as stated in the previous analysis, if the Stochastic should remain above the 70% level after the short term correction, the market movement for the short term shall remains bullish biased. (Study C)
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