On the daily chart, there was confirmation of a technical rebound in motion. Even though the recovery came very late in the week, this bullish signal was in its formative period when the index consolidated above the 1,050-point level. The key index's decisive breakthrough above 1,100 with strong volume last week was just what the market needed to overcome the string of dismal performances before that. The success of the index to hold above this level may precede a run of strong performances for the weeks to come.We have revised upwards the support level to 1,108 in view of intraday technical rebounds recorded at this level last week. We expect this support line to hold when forecasting the direction of the spot contract this coming week. Judging by the presence of a recovery on the daily Relative Strength Index (RSI) oscillator, we are optimistic that the bullish rebound mentioned above will materialise.
Indicatively the north bound directions found are tell-tale signs of a strong price breakout. The Moving Average Convergence divergence indicator (MACD) has just turned positive after the decisive crossover last Wednesday. The unanimity in the trend of the technical indicators suggests further recovery ahead.
Weekly indicators on the spot contract too have turned positive after the long white Marubozu pattern recorded. The weekly RSI and Commodity Channel Index (CCI) have edged up at the neutral region, signalling a momentum recovery in motion. Tactically the index futures spot contract has breached its indicative support at 1,100 in anticipation of a deeper recovery in the immediate term. The rebound last week has opened up the potential in the medium-term chart. With the daily oscillators ascending to the overbought, the spot contract can be expected to gain more ground with the target at 1,148 holding back some of the selling.
Weekly indicators on the spot contract too have turned positive after the long white Marubozu pattern recorded. The weekly RSI and Commodity Channel Index (CCI) have edged up at the neutral region, signalling a momentum recovery in motion. Tactically the index futures spot contract has breached its indicative support at 1,100 in anticipation of a deeper recovery in the immediate term. The rebound last week has opened up the potential in the medium-term chart. With the daily oscillators ascending to the overbought, the spot contract can be expected to gain more ground with the target at 1,148 holding back some of the selling.
Technical outlook
The MACD remains positive with the faster below the signal line. Both lines at the positve region. The daily RSI closed at the neutral. The daily CCI finished at the neutral.
Recommendation : KIV LONGs >>> Look to SELL INTO STRENGH above 1135 level. GOODLUCK2U
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