Market trend 6th March 2011
Another nail biting week on the roller coaster of the ever temperamental stock markets.
1) Dow Jones
-It broke the 20 days moving average line (Gulp!) . The Bollinger band is still holding steady which means volatility is still normal (Phew!). Also since the DJ is hovering the lower part of the Bollinger band, it signals buying opportunity. Especially since the strong uptrend is still intact (see the blue parallel lines). So? I think the party is not over. It is taking a rest.
2) Nasdaq
-Slightly more volatile then DJI with crossing below the 100 MA. A less then positive signal compared to the DJI. But the overall trend still track very closely with DJI.
3) Hang Seng
-I think it will be trending sidewards for a while (see the blue parallel line) with a slight trend going downwards (sweating..). Why I say that? Well, the high is getting lower and the lows are holding at around 22500. Volume is lowering so I don’t think things will go side ways.
-From what I understand, Mr Wen is facing a tough dilemma now. Currently he has to stop the momentum of the Jasmine protest from building up by promising to ease the inflation rate and close the income gap difference. The CCCP knows this and has been raising intrest rate for the pass few months. As we all know, this is bad for the stock market and that is why we are seeing a side way trend. (see the summary chart below I created to explain the relationship between interest rate and what it will do to the market)
-Another tool that Mr Wen has to curb inflation rate is to raise the value of RMB. But raising the value will mean potentially driving work opportunity out of China and risk more job loses.
-So…. I think the China market will go side ways and maybe go down in the mid term.
4) Singapore
-Haiz…. don’t know what to say… US down we also down… China down we also down! Anyway, from the pattern you can see that we are tracking a lot closer to Hang Seng’s trend then US for now. So I think short term, it will go up to at least 3120, where it will hit a resistance level.
-Good news is that it has just crossed the 20 MA, so momentum is positive. I will be looking out for good value stock now. 🙂
