S&P500 powers into 1300 range

The S&P500 index found support at the 200-day moving average, as suggested in my last post, and has powered above the sticky 1297 level. This a short-term bullish development, and may carry enough momentum to target 1335, possibly with a pit-stop around 1315-1320 range. Very short-term, indicators are overbought, and may result in a back-test of 1297, or sideways action.

Shanghai Composite Short-Term: Positive Divergence

Just a quick note to highlight the positive divergence in the Shanghai Composite, as well as the Shenzhen Index. In recent past, such divergences have resulted in a significant rebound. The upside target at the moment is capped at 2750 for the SSEC, and 1135 for the SZSE. However, as noted in the previous post, if the medium-term triangle pattern was indeed broken last week, i would be careful with any longer duration trades at this stage.

Shanghai Breakdown, Hang Seng Update

Shanghai Composite broke down through the bottom line of the big triangle. Although oversold short-term, this is a medium to long-term bearish development. Immediate support is around 2580. We will have to monitor if the break holds over the next week or so, and derive reasonable targets for the downtrend if it develops.

Similarly, Hang Seng has broken below the 22400 level outlined in the earlier post and deteriorated rapidly. Currently oversold with a weak RSI divergence and sitting on the bottom of the channel. Looking for a rebound to test the 22400 level in the short-term

S&P500: Reaching 200-day Moving Average

The S&P500 is reaching the 200-day Moving Average(green) around 1250. Coupled with the previous low(labelled a), it is a likely region for a bounce. In case of a failure, good support is the previous high of 1220. Note the suggested corrective wave count, implying possibility of further upside in the medium-term. For now though, any upside should be limited to 1300 range.

Singapore Exchange & The Straits Times Index

SGX - Set for a bounce?

Previous posts on the Singapore Exchange (SGX), speculated on my bearishness on the merger as well as the stock price.Since my last post noting a break in the uptrendline for SGX, prices have declined, attempted a back-test, and declined again. A technical bounce is likely for the SGX here, around $7.20. Supporting this view are the declining volumes and the RSI divergence. A sustained break below this level on increasing volumes will negate this play. Upside is limited to the $7.70 pivot initially, or the downtrendline(blue) whichever comes first.

STI - At support, but no reversal signals yet

On the other hand, the Straits Times Index (STI) has not thrown up any reversal signal yet. But price is at a decent support level here at 3040. With weak global cues going in the summer holidays, it remains to be seen if STI can muster enough buyers to move up towards 3120. Further support is as shown on chart.

All the best!