Free technical analysis on Hong Kong stock market, world stock markets, foreign exchange market, commodities market, as well as some important notes for being a successful trader.
Monday, December 13, 2010
A further step towards Head-and-Shoulder formation (2010-12-13 HSI analysis)
Last week was a quiet week, nothing important happened. HSI opened at 23,507 on Monday and closed at 23,162 on Friday. However, the index is in progress of forming head-and-shoulder pattern.
Daily chart of HSI:
We can see that the third peak has formed. The red neckline would be the next support level, which is at around 22,750. It would be a very critical level. As suggested by the head-and-shoulder pattern, if the index breaks the supporting neckline, it would drop as much as the distance between the neckline and the highest peak; hence, HSI could drop to as low as around 20,600 estimated by the pattern.
It would mean a 10% drop in index which is definitely very serious. Though MACD has been falling, it is still around zero now. This would not be a vital power supporting the index.
Weekly chart of HSI:
The index has moved a step towards the red uptrend line. This line is a support, which tells us that there might be a support at around 22,500. The shrinking volume and bearish cross of MACD and EMA give bad signals about HSI.
Combining both charts, if the index this week drops through 22,700, we don't have to make decision on whether to sell everything or short-sell stocks too quickly, as there will be a support at 22,500. It is possible for the index to have false breakdown. If the index drops below 22,500 at close of this week, then it would be a really really bad signal. We can then decide how to make profits on the coming bearish waves.
Daily chart of HSI:
We can see that the third peak has formed. The red neckline would be the next support level, which is at around 22,750. It would be a very critical level. As suggested by the head-and-shoulder pattern, if the index breaks the supporting neckline, it would drop as much as the distance between the neckline and the highest peak; hence, HSI could drop to as low as around 20,600 estimated by the pattern.
It would mean a 10% drop in index which is definitely very serious. Though MACD has been falling, it is still around zero now. This would not be a vital power supporting the index.
Weekly chart of HSI:
The index has moved a step towards the red uptrend line. This line is a support, which tells us that there might be a support at around 22,500. The shrinking volume and bearish cross of MACD and EMA give bad signals about HSI.
Combining both charts, if the index this week drops through 22,700, we don't have to make decision on whether to sell everything or short-sell stocks too quickly, as there will be a support at 22,500. It is possible for the index to have false breakdown. If the index drops below 22,500 at close of this week, then it would be a really really bad signal. We can then decide how to make profits on the coming bearish waves.
Sunday, December 12, 2010
Important Economic Data (2010-12-12)
Not much important economic data released in the coming week
14-Dec (Tue)
17:30 UK Consumer Price Index (YoY: NOV) {Forecast: Unchange}
21:30 US Advance Retail Sales (NOV) {Forecast: Drop by 0.6%}
15-Dec (Wed)
03:15 US FOMC Rate Decision (DEC) {Forecast: Unchange}
17:30 UK Jobless Claims Change (NOV) {Forecast: Drop to -3.0K from -3.7K}
21:30 US Consumer Price Index (YoY: NOV) {Forecast: Drop to 1.1% from 1.2%}
source: http://www.dailyfx.com/
14-Dec (Tue)
17:30 UK Consumer Price Index (YoY: NOV) {Forecast: Unchange}
21:30 US Advance Retail Sales (NOV) {Forecast: Drop by 0.6%}
15-Dec (Wed)
03:15 US FOMC Rate Decision (DEC) {Forecast: Unchange}
17:30 UK Jobless Claims Change (NOV) {Forecast: Drop to -3.0K from -3.7K}
21:30 US Consumer Price Index (YoY: NOV) {Forecast: Drop to 1.1% from 1.2%}
source: http://www.dailyfx.com/
Friday, December 10, 2010
Still some waves to go (2010-12-10 0915.HK analysis)
The index rose yesterday. So its really hard to predict the movement of HSI these days, but it is forming a head-and-shoulder pattern. Please remind that the neckline is at around 22,750 and if the index breaks it, the plunge will be very huge.
Anyway, before facing such a bearish market, we can try to dig some good potential small-cap stocks for short-term trading. I discovered one: LinMark Group 0915.HK
After breaking the red pennant, the stock surged crazily in late November and early December. We have missed this chance already. However, I think there would be a second wave coming.
First reason is that the stock did surge greatly in Jun10. Then during the plunge afterwards, the volume was not high. Corporate investors clearly were not selling their shares. They should be collecting and preparing for pulling the price to a higher level.
Therefore, after few months of consolidation, the price boosted again in late November. It is now moving towards 0.76. This is the first resistance level. The next one would be 0.87 which is the highest point.
But I expect that the price would go further than 0.87. I have thought of one opposing reason is that corporate investors were selling the shares during the consolidation period slowly, and lifted the price again to sell more in higher price.
However, the stock has been in this range since late 2009. I could not see much profits for these big investors. They would definitley require more profits for such a long time. Therefore, they would continue lifting the price upwards.
Anyway, before facing such a bearish market, we can try to dig some good potential small-cap stocks for short-term trading. I discovered one: LinMark Group 0915.HK
After breaking the red pennant, the stock surged crazily in late November and early December. We have missed this chance already. However, I think there would be a second wave coming.
First reason is that the stock did surge greatly in Jun10. Then during the plunge afterwards, the volume was not high. Corporate investors clearly were not selling their shares. They should be collecting and preparing for pulling the price to a higher level.
Therefore, after few months of consolidation, the price boosted again in late November. It is now moving towards 0.76. This is the first resistance level. The next one would be 0.87 which is the highest point.
But I expect that the price would go further than 0.87. I have thought of one opposing reason is that corporate investors were selling the shares during the consolidation period slowly, and lifted the price again to sell more in higher price.
However, the stock has been in this range since late 2009. I could not see much profits for these big investors. They would definitley require more profits for such a long time. Therefore, they would continue lifting the price upwards.
Thursday, December 9, 2010
Trigger? (2010-12-09 VIX analysis)
After a little breakout last week, the index returned back into the wedge. It is moving closer to the vertex. VIX touched the bottom line and rebounced yesterday, which look like that it would have another try to break the pennant from below. It is more likely to have a large breakout, but what would be the trigger? Extremely bad news from Spain and Portugal? War? Terrorist attack?
God knows.
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