Winchart Technical Analysis -
Daily Market analysis
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In line with the Dow Jones closing higher after the interest rate cut, the 2nd board index opened gap up on Wednesday. However, as indicated by A, the 2nd board index remains resisted by the Bollinger Middle Band. Therefore, this is only a technical rebound for the 2nd board index. If the Bollinger Bands Width should remain expanding with the 2nd board index staying below the Bollinger Middle Band, there are still downside risk for the 2nd board index. Nevertheless, the next support is still at 101.09 Fibonacci Retracement Line.
Even though the volume for the 2nd board market increased on Wednesday, it is still staying below the 40-day VMA level. This suggests that the overall participation to the 2nd board market is still insufficient. Therefore, without sufficient inflow of fresh capital, the 2nd board index is less likely to regain its strength. (Study B)
As circled at C, the Stochastic %K line breaks above the 30% level on Wednesday. If the Stochastic %D line should break above the 30% level, it would confirm the %K line signal, and the market movement for the short term would turn from bearish biased to neutral.
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