Winchart Technical Analysis -
Daily Market analysis
Due to the over night losses in the US market as well as the losses in the regional markets, the 2nd board index also retreated on Friday. As shown on the chart above, the 2nd board index falls below the 118.93 level, and had a daily low at 115.99 before successfully rebounded from the 14, 21, 31 EMA dynamic support. Therefore, the 14, 21, 31 EMA is still serving as the dynamic support to the 2nd board index. As long as the 2nd board index is still supported by the rising dynamic support, the uptrend is still intact. (Study A)
As indicate by B, volume for the 2nd board market on Friday decreased another 11% with the volume staying below the 40-day VMA level. This suggests that the participation of 2nd board market was relatively low. It is considered normal or healthy to have a lower volume during a retreat, but if the 2nd board index should resume its uptrend, more volume is definitely needed. (Study B)
As circled at C, the Stochastic %K line falls marginally below the 30% level, which is a short term bearish region. If the %D line should fall below the 30% level, it should confirm the %K line signal, and the market movement for the short term would turn bearish biased. (Study C)
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