Technical Brief – 23 July 2009

I am gonna be away from tomorrow for the weekend and since I am on leave let’s take a quick look at the markets during lunch break.

The STI is poised for resistance at 2580-2600, and then the whole region towards 2700. The thing is I see many TAs saying the same thing. When that happens, there is a chance that the market will either not hit the target, or it will get past the resistance to flush people out. That said, the markets are not primed for a buying opportunity. I am seeing supports at 2424 to be re-tested and essentially this level should not crack. A crack below would mean buyers waiting to buy here are not strong enough to hold the selling pressure and could mean a turn of events. A retest and bounce off 2424 would be a healthy retracement. A break below technically would trigger traders to dump long positions and turn short and may cause a fast sell off. But markets may turn up forcing short covering and a subsequent surge. Such a scenario is deemed as a whipsaw to me and does not really imply support was broken.

I will be looking to square off some positions by end of the day to either extend contra period, or to close them as I don’t want to be bothered bout the market while on a vacation. I opened kepcorp and sembmar yesterday and will see how it is deemed to close today to make a decision.

Bottom line. There is money to be made for the upside. The catch is, you need to know where to take profit. And do so dilligently without being greedy.

Have a good weekend in advanced!