Winchart Technical Analysis -
Daily Market analysis
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As the US market closing sharply lower, the 2nd board index also ended lower on Monday, closing 1.53 points to 106.65 points. As indicated by a, the 2nd board index fall below the 14, 21, 31 EMA. If the 2nd board index should remains below the 14, 21, 31 EMA, the EMA shall reverse its role to become the dynamic resistance for the 2nd board index, and the outlook for the 2nd board index shall turn negative. Nevertheless, the next support for the 2nd board index is seen at 104.79 Fibonacci Retracement Line.
As indicated by B, volume for the 2nd board index remains above the 40-day VMA level. This shows that the 2nd board market is still actively participated. However, the 2nd board index must return to above the EMA, and with the volume staying above the 40-day VMA level, then only the 2nd board index will have a chance to resume its uptrend. If the 2nd board index should remain below the falling 14, 21, 31 EMA, an increase of volume shall interpret as an increase of selling pressure.
As circled at C, the Stochastic %K line fall below the 30% level, giving a first short term bearish signal. If the Stochastic %D line should fall below the 30% level, it would confirm the %K line, and the market movement for the short term would turn to bearish biased.
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