Share analysis
Based on the daily chart, uptrend still intact as the index
made higher high higher low. However for the past three days, market correction
or profit taking activities can be seen at market top as the index climb to all
time high, 1,880 level. DMI indicator shows flat reading indicates that the
uptrend is losing momentum and the market will be flat for the next few days.
So, I reckon that short term correction is imminent. We used Fibonacci
retracement to determine the support level on the index. Failure to stay above 1,836
level (61.8% fibs retracement), will lead to further downtrend and the next
psychological support will be at 1,800 level.
Trading strategy
Since the market is flat and lack of volume, it is better to
stay sideline. Buy on weakness is the best strategy for long term investor. New
long can be initiate at market bottom with the confirmation of market rebound.
Day trader may bet on mid cap and small cap stock that usually will surge next
after big cap. Buy on breakout is the best trading solution for day trader. Use
volume and candle stick as confirmation.
Price projection
Resistance – 1,880 (previous high), 1,900 (psychological resistance)
Support – 1,870
(immediate support), 1,852 (38.2% fibs), 1,845 (50% fibs)
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