World Indices (For Week: 6 Apr ~ 10 Apr)

DOW JONES INDUSTRIAL

This week has been a rather bullish week for DJI. As previously anticipated, the Fibo 38.2% + Resistance turned Support levels (7468 to 7500) is holding out quite well and price has currently broken out of Fibo 50% (7778). Based on closing from last Friday (3 Apr), the price is currently resisted by Fibo 61.8% (8087) and 100-Day Moving Average. A white hanging man formation is also observed which indicates a possible slight retracement to Fibo 50% (7778) and Uptrend line, before resuming its bullish run.

The real test for DJI will be the slew of coporate earnings which will be released this week. Should the market not react favourably and the Fibo 50% + Uptrend line fails to hold, a SHORT position may be opened.

HANG SENG INDEX

For the Hong Kong market, HSI has staged a rather impressive run for this week too. Notice the multiple Rising Window Supports which are currently holding the price up. This indicates the powerful momentum of the stock. The price closed with a doji on last Friday, which indicates a deliberation (either a pause for retracement before resuming bullish trend upwards OR a reversal of bullish sentiments). Scenario 1 seems to be more likely at this point in time as I anticipate the stock price to take a short dip towards the upper limit of recent gap support (13975) and bounce off from Uptrend Support Line to test gap resistance (14763 - 14966).

STRAITS TIMES INDEX

We see a similar note for somewhere closer to home. STI closed on last Friday with a variant of a white hanging man formation as well. A possible retracement to support at uptrend line will be healthy at this point of time before resuming its bullish streak to test the gap resistance (1863 - 1881).

In a nutshell: So what is the cue that we can take from all these indices? The market is extremely volatile these days, should one decide to take a position, they have to be relatively nimble and lock in any profits quickly. Should one take a LONG position on rebound from critical supports? - Maybe, but do note that all technical indicators are currently in OVERBOUGHT region. Though classical analysis takes precedence over technical indicators, the recent 'rally' is, in my opinion, too fast and furious.

A safer bet would be to wait for the price to break out of the current Uptrend Support Line and enter with a SHORT position as we are still technically in a bear market.