As indicated by A, the 2nd board index retested the 14, 21, 31 EMA dynamic resistance and the 105 points resistance. However, the 2nd board index remains resisted by these resistance lines. Therefore, the outlook for the 2nd board index shall remains bearish biased. Nevertheless, 98.50 points will be the next support level for the 2nd board index.

As indicated by B, although volume for the 2nd board market increased 34% on Monday, it is still staying further below the 40-day VMA level. This suggests that the participation of the 2nd board market is still low. Also, the lower volume also suggests a lack of fresh capital inflow, and therefore, the 2nd board index is less likely to regain its strength.

As circled at C, the Stochastic is still showing a short term bullish signal while staying above the 70% level. If the Stochastic should remain above the 70% level, the market movement for the short term is still bullish biased. However, the Stochastic is still a secondary indicator, and therefore, should there be an conflicts between indicators signal, it is always a better idea to refer back to the primary indicators like Moving Average or Bollinger Bands.

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