Winchart Technical Analysis -
Daily Market analysis
On Wednesday, the 2nd board index was precisely supported by the 115.37 level, ended the higher 0.73 of a point higher to 116.41 points. Despite the 2nd board index break out from the 115.37 level, volume on Wednesday failed to suppot the break out, and therefore, there is a risk of having a false breakout.
Nevertheless, as indicated by A, as long as the 2nd board index is still supported by the 14, 21, 31 EMA dynamic support, the outlook shall remains bullish biased./
As indicated by B, volume for the 2nd board market declined 3.7%, and therefore, it failed to confirm the break out of the 115.37 level. By right, in order to sustain the bullish sentiment, volume must increase and continue staying above the 40-day VMA level. If volume should decline and fall below the 40-day VMA level, it would be a sign of lack of continuity of capital inflow, thus the bullish sentiment of 2nd board index is less likely to sustain.
As circled at C, the Stochastic is still showing a short term over-bought signal. Based on the historical static of the 2nd board index, when the Stochastic is near 100% level for over 1 week, a technical correction would take place, and therefore, chances for the 2nd board index to have a short term technical correction is relatively higher. (Study C)
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