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Sri Lanka Equity Forum » Stock Market Charts & Graphs » Market turnaround -Technical Signals witnessed!!

Market turnaround -Technical Signals witnessed!!

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Quibit

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
According to my technical analysis market is likely to turnaround in the coming week. Buy signals are witnessed in many stocks including ASI and MPI. MacD's, Stochastic Oscillators, Wiliams, RMO all positive. All leading and lagging signal indicators show an upward trend. I am not the best around, but I am sure our Technical Guru.. GANN knows better than all of us.

Let's wait for his report!!!!

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
[img][You must be registered and logged in to see this image.][/img]

Above is the weekly chart of ASI.

I would be bullish only when ASI closes above 7320(Marked in cyan color)
Also note how the market changed the trend around the 50% re-tracement.



Last edited by gann on Mon Mar 28, 2011 12:14 am; edited 2 times in total

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Quibit

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Thanks.. Gann
I agree with you on candlesticks on fibonacci retracement, with the indicative support and resistant, but have a look the MacD of MPI and the leading oscillators. ASI is just about to break the signal line. Also the RMO and the rainbow!!! All look very positive..



Last edited by Quibit on Mon Mar 28, 2011 12:26 am; edited 2 times in total

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Quibit wrote:Thanks..
I agree with you on candlesticks on fibonacci retracement, but have a look the MacD of MPI and the leading oscillators. ASI is just about to break the signal line. Also the RMO and the rainbow!!! All look very positive..

To confirm uptrend you need to see a higher high and a higher low. We have the higher low from last week. ASI is required to close above 7320 to post a higher high. Also The probability for ASI to move sideways is also high. ASI showed some sideways movement on the 25th.

BTW MILANKA looks good.

supun.perera

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Stock Analytic
Stock Analytic
@gann wrote:To confirm uptrend you need to see a higher high and a higher low. We have the higher low from last week. ASI is required to close above 7320 to post a higher high. Also The probability for ASI to move sideways is also high. ASI showed some sideways movement on the 25th.

Hi Gann,

I did a similar analysis (but I prefer the daily candles). I too second your opinion on the ASI.

After the double-top and the breaking of the key support level (7498), the ASI crashed down only to recover at the 61.8% level (no surprise there!). Now its bouncing along at 50% level. Though there is a higher-low, the ASI must give us a higher-high around the 38.2% level (according to my chart its 7354 - slightly higher than yours) to indicate a clear Northern direction. This I see as a critical indicator, because the current 50% level has been a Resistance in early October. So hopefully, it will become a Support now.

Once the 38.2% level is broken through, the next resistance could be 23.6% level (7498-7549 region).
The reason is the valley between the double-top.

--------------------

Another interesting thing was shown in the RSI. The ASI was in "overbought" region for more than a month. It moved past 80 for a considerable period as well. But on the recovery, the ASI barely went into the "oversold" area. It turned back around 35. In other words, the ASI was quite content at being in the "overbought" area than being in the "oversold" area. So I believe, that the market is capable of quick recovery. However, it must show clear evidence as I (and Gann) observed above.

(Pls click on the image below to view the full chart)
[img][You must be registered and logged in to see this image.][/img]

Soundchips


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Thanks for the Charts and information.

Meta Trader

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@gann wrote:
@Quibit wrote:Thanks..
I agree with you on candlesticks on fibonacci retracement, but have a look the MacD of MPI and the leading oscillators. ASI is just about to break the signal line. Also the RMO and the rainbow!!! All look very positive..

To confirm uptrend you need to see a higher high and a higher low. We have the higher low from last week. ASI is required to close above 7320 to post a higher high. Also The probability for ASI to move sideways is also high. ASI showed some sideways movement on the 25th.

BTW MILANKA looks good.

yes ASI 7320 is a key level according to my charts also Wink
but this wapo is killing every one.

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Hi Supun,

Thanks for sharing your analysis. I have noted some keypoints you had mentioned.
What do you think of MILANKA?

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Meta Trader wrote:

yes ASI 7320 is a key level according to my charts also Wink
but this wapo is killing every one.

APO WAPO EPO lol! lol! lol!

supun.perera

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Stock Analytic
Stock Analytic
Observations on Milanka

1. Milanka has recovered above a major support line (6800), which had been strong in November and December as well (the green line).

2. Milanka started forming the double-top days before the ASI.

3. Despite the current Northern movement, the main trend still remains bearish (note the long blue trend line).

4. There seems to be a resistance around 7350 area. It has been clearly broken only in late September where high momentum was seen (note the trend line near late September and RSI above 70).

5. Milanka is still below the 38.2% level. The next key level would be the 61.8% (note the perfect alignment between the 61.8% level (7100) and the valley between the double-top. In addition, 7100 has been S/R since mid October).

6. RSI on Milanka has clearly moved out of the "oversold" area. Note that, at its worse, the RSI on Milanka has been around 18!


Analysis:
- The Milanka constituents were offered at good prices lately. This is the reason for the RSI to reach lows around 18. (RSI was low because of the stronger negative changes). But a Bullish trend is now evident from the last week's performance on Milanka (In addition, RSI currently hovers around 40-50).

- Milanka is sitting on a stable support (6800) and moving up. Its possible for it to consolidate around the 61.8% level. The current upward momentum could allow that (note the blue trend line starting from 22nd March). According to the crossing of the trend lines with the 61.8% level, and the upward pointing RSI, this could happen within this week itself (or early next week).

- In order to indicate real growth, Milanka needs to prove itself by clearly breaking above, on reaching the 61.8% level.

- IF Milanka can do so, then the only resistance level is at 7350. However, as seen in late September, this resistance can easily be broken if there is strong momentum. From last week's price action as well as current RSI value, such momentum is possible.

Conclusion
According to Milanka's performance, the market has potential for a strong upward momentum within the next two weeks.

This is just my personal view of the market, so guys pls don't hold me against this, ok. :)

(Click on image to view completely)
[You must be registered and logged in to see this image.]

supun.perera

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Stock Analytic
Stock Analytic
@gann wrote:Hi Supun,
Thanks for sharing your analysis. I have noted some keypoints you had mentioned.

you are welcome. Would like to know which keypoints interested you...

@gann wrote:
What do you think of MILANKA?

Posted above.



Last edited by supun.perera on Mon Mar 28, 2011 11:48 am; edited 1 time in total (Reason for editing : typo)

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
All this is very well if the market upwards moves had been organic. As has been mentioned here many times it's been anything but. Even a couple of brokers acknowledged that the upwards movements had an artificial flavour to it (eg: NDB Stock brokers report published in the papers last week).

Even today it's obvious that someone is making a valiant effort to keep the index afloat but without much success.

supun.perera

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Stock Analytic
Stock Analytic
@tubal wrote:All this is very well if the market upwards moves had been organic. As has been mentioned here many times it's been anything but. Even a couple of brokers acknowledged that the upwards movements had an artificial flavour to it (eg: NDB Stock brokers report published in the papers last week).

What you say is quite true in real life.

However, my post was based on an interpretation of the charts and nothing else.

My view is to stick to ones own judgment/analysis, whilst acknowledging such artificial movements.
There are shepherds and then there are sheep... As per my understanding, there are two options for success in this kind of a market - either be a Shepherd OR be a Black Sheep :) (well... there is always the third option of being a broker)

I don't have the millions to become a shepherd (or a broker), so I rely more on technicals rather than fundamentals, hoping that it would make me more of a black-sheep.

I may be wrong here. But it keeps me sane and hopefully in profit. Just like you implied, if the price-action is not consistent with fundamentals, what other option do we have? In my opinion, its technicals. And hence this sub-forum for technical traders.

But fundamentals has its place on longer term views. No amount of manipulation will erase that!

I mean no offense to anyone. I merely wanted to clarify my position with regard to trading, even during artificial market conditions.

Green trades to all!

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
@supun.perera wrote:
@gann wrote:Hi Supun,
Thanks for sharing your analysis. I have noted some keypoints you had mentioned.

you are welcome. Would like to know which keypoints interested you...

@gann wrote:
What do you think of MILANKA?

Posted above.

Milanka index has gome up today.

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Aamiable wrote:

Milanka index has gome up today.

I would like to see MILANKA trading above 6900 to be optimistic bounce bounce

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
@gann wrote:
@Aamiable wrote:

Milanka index has gome up today.

I would like to see MILANKA trading above 6900 to be optimistic bounce bounce

There some early indications. Banks have picked up today , some diversified blue chips and so on.

supun.perera

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Stock Analytic
Stock Analytic
@gann wrote:
I would like to see MILANKA trading above 6900 to be optimistic :bounce: :bounce:

yes.... 6900 is the 38.2% Fib level...

btw, Milanka is up only by 0.39 ... well.. at least it didn't go down... :scratch:



Last edited by supun.perera on Mon Mar 28, 2011 3:06 pm; edited 2 times in total (Reason for editing : correction)

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
Supun, et al, the point I am trying to raise is that both Technical analysis and Fundamental analysis in this market is equally useful (or useless take your pick).

I don't think you were around in early February, when some of us called a market top. The ASI continued to climb after that point and it looked like the call was wrong. But in actual fact the market continued to decline while the ASI kept going on up.

First the ASI went up because of the GREG group, then it was oil palm, then of course the notorious WAPO. if you look at the charts of individual stocks, you will find that almost all of them had their peak during the first 10 days of February. This phenomena was identified and reported here.

The the ASI started to dip, it actually started happening around the time that many of the shares found support levels. So once again the majority of the shares in the market kept going up while the index declined. The advance/decline ratio will show you that.

Even today, the intra day chart had many ups and downs. Compare that with the intraday charts of SLTL, CFIN, COMB and BUKI. WAPO no longer has the impact it used to have. But there are plenty of better and more subtle alternatives

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@supun.perera wrote:

Would like to know which keypoints interested you...

Once the 38.2% level is broken through, the next resistance could be 23.6% level (7498-7549 region).



The keypoint is relavance given to 23.6 based on previous pivot point.

chamith

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Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
[You must be registered and logged in to see this image.]
[CLICK ON THE GRAPH TO SEE THE REST]

According to my MACD analysis on ASI, its about to cross the line. SO hopefully we can expect the line to be crossed in couple of days. According to stochastic Oscillator clearly ASI have come up from over sold region. But its trend has been disturbed in last couple of days. So to be optimistic we can call it due to WAPO and some credit clearing issued caused that.

As a conclusion i feel that ASI is on the fence, with more advantage for upside movement. Next couple of days will bring us the initiation indicators of the movement. Hopefully should be green due to ; End of March credit clearing, UBC commencement, Most of the investors feel optimistic these days. Very Happy

supun.perera

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Stock Analytic
Stock Analytic
@tubal wrote:Supun, et al, the point I am trying to raise is that both Technical analysis and Fundamental analysis in this market is equally useful (or useless take your pick).
LOL yes....I agree that both have their uses.

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
Push up SLTL, JKH, DIAL, CFIN and COMB simultaneously and viola the index which was down 0.75% five minutes ago is now down only 0.1% push up BUKI, CARS and woah there the market is green yipeeeee!

Never mind that we have 100 counters that have declined while only 50 have gone up

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
Sorry guys small error. The second stage of the push didn't involve BUKI and CARS after all. It was SLTL being pushed up a little further and then HNB.

dimithri


Equity Analytic
Equity Analytic
@chamith wrote:[You must be registered and logged in to see this image.]
[CLICK ON THE GRAPH TO SEE THE REST]

According to my MACD analysis on ASI, its about to cross the line. SO hopefully we can expect the line to be crossed in couple of days. According to stochastic Oscillator clearly ASI have come up from over sold region. But its trend has been disturbed in last couple of days. So to be optimistic we can call it due to WAPO and some credit clearing issued caused that.

As a conclusion i feel that ASI is on the fence, with more advantage for upside movement. Next couple of days will bring us the initiation indicators of the movement. Hopefully should be green due to ; End of March credit clearing, UBC commencement, Most of the investors feel optimistic these days. Very Happy


Hi Chamith, What is MACD?How to read it from the graph?

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
As I have mentioned in the previous posts in this thread, ASI was showing an accumulation setup after 18th of march. (ie: more sideways movement). so stay tuned for the next couple of days.

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@gann wrote:As I have mentioned in the previous posts in this thread, ASI was showing an accumulation setup after 18th of march. (ie: more sideways movement). so stay tuned for the next couple of days.


not very usefull when the ASI follows a script written by someone instead of reacting to investor sentiment.

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@tubal wrote:
@gann wrote:As I have mentioned in the previous posts in this thread, ASI was showing an accumulation setup after 18th of march. (ie: more sideways movement). so stay tuned for the next couple of days.


not very usefull when the ASI follows a script written by someone instead of reacting to investor sentiment.

True..But so far ASI has been respecting S/R levels. There maybe multiple forces operating having opposite actions and the effect is nullified Smile

29 ASI- 30min chart on Thu Mar 31, 2011 8:22 am

gann

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Senior Manager - Equity Analytics
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if asi breaks below 7200, i expect it to drop to next support of 7150. for a trend change confirmation asi needs to break above the top resistance line(Magenta).



Last edited by gann on Thu Mar 31, 2011 8:51 am; edited 2 times in total

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@gann wrote:[You must be registered and logged in to see this image.]


if asi breaks below 7200, i expect it to drop to next support of 7150. for a trend change confirmation asi needs to break above the top resistance line(Magenta).

Gann, this is just the point. In couple of other posts you mentioned that you can spot a share that's manipulated at a glance. I am surprised that you cannot do the same with the ASI.

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@tubal
we still have to look at the trend. I am only studying the current trend. what causes that trend maybe manipulation. no one knows. but the resultant of the prevailing trend is
what i am interested. aslso i have updated the chart.

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@gann wrote:@tubal
we still have to look at the trend. I am only studying the current trend. what causes that trend maybe manipulation. no one knows. but the resultant of the prevailing trend is
what i am interested. aslso i have updated the chart.

In that case let me remind you that for a trend line to be accurate it has to go through three points and not two.

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
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Updated with proper channels. so what path asi going to take red or green?

top magenta line hit 4 times. and the red is the parallel to it. Green line hits 4 times and the parallel bottom line is in magenta. also asi is between a symmetrical triangle
shown by two diverging magenta lines.



Last edited by gann on Thu Mar 31, 2011 8:50 am; edited 3 times in total

Quibit

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@gann wrote:
True..But so far ASI has been respecting S/R levels. There maybe multiple forces operating having opposite actions and the effect is nullified Smile

Yes Gann! watching the market and technicals very very carefully. It should turn one of these days. Fundamentals of the country haven't change much during last 6 months but the market yet to head north!! making fundamentalist confused!

I was a strong believer of Fundamental Analysis against all odds. But a recent study of the technical analysis have given me a different perspective to the market and proved to be accurate in many instances. So I believe, Technical Analysis as a another power tool that helps you to evaluate market behavior and to make right decisions.

Gann, Thank you very much for your support!!

gann

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Quibit wrote:
@gann wrote:
True..But so far ASI has been respecting S/R levels. There maybe multiple forces operating having opposite actions and the effect is nullified Smile

Yes Gann! watching the market and technicals very very carefully. It should turn one of these days. Fundamentals of the country haven't change much during last 6 months but the market yet to head north!! making fundamentalist confused!

I was a strong believer of Fundamental Analysis against all odds. But a recent study of the technical analysis have given me a different perspective to the market and proved to be accurate in many instances. So I believe, Technical Analysis as a another power tool that helps you to evaluate market behavior and to make right decisions.

Gann, Thank you very much for your support!!

Thank you for your support and encouragement as well. You are a one talented admin Smile

ASI seems to be pulled by two opposing forces. ( GREEN channel and the RED channel in the chart.) and the resultant is a symmetrical triangle.

gann

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trend hits are circled. ASI should move above 7225 to oscillate in the bullish trend line.

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