Market View
The Straits Times Index ( 2,940.10 ) :
The STI has finally closed above the 200 MA decisively. Next target 3,010 ( Fibo 61.8% ). A fresh buy signal** in the mechanical trend following chart has surfaced ( circled ). This implies the bull has regained control of the market for the mid term trend.
** No, I am not suggesting you buy now. Wait for pull back as the market has rallied too much.
On the shorter term perspective, there is clear sign of RSI bearish divergence. I don't know how long can the bulls procrastinate the honoring of this bearish sign. Chances is it can't procrastinate forever and will soon has to honor this sign with some decent pull back. The pull back should ideally not cross below 2,874. A close below 2,874 is a sign of weakness and suggest the breakout today is a bull trap and may glide down to 2,793.
Yangzijiang Update :
YZJ met resistance at $1.21 as well as the 200 MA and closed below it. There is a clear sign of RSI divergence. The closing today is an inverted hammer candlestick ( shooting star ). Unless the bull decides to negate all these bearish signs as it has done many times recently. We should see a decent pull back to $1.15 / $1.08. Buy on dip.
Labels: Market Action, Stock Pick
posted by Market Wizards @ February 06, 2012
Comments: 0
