Today's interesting charts
Comment of the Day

July 22 2010

Commentary by David Fuller

Today's interesting charts

David Fuller's view The Subscriber's Chart Library is a crucial part of the Fullermoney service for hands-on investors. It is also a never ending work in progress. Recent upgrades include even greater speed of access, Stockcube's own Volume Adjusted Price (VAD) indicator and On Balance Volume. The Library is fully customisable. Why waste money on stand-alone chart services?

Here is a sample of how to use the VAD Indicator: Note the bullish divergence for Vinci, where the share price was lower in early July than during the May reaction but the VAD lows for the same period were higher. This suggests that the share is now under accumulation following a correction.

India (Sensex) (p&f, weekly & daily) - has pushed to a new closing high for the year, having been rangebound since last September, albeit with a slight upward bias. A close beneath 17,400 would now be required to offset current prospects for higher levels, supported by underlying trading. The Sensex Index's upward break is also reaffirmed by the leading Bombay Banks Index (no apparent need for stress tests here). A close beneath 10,000 would be required to offset short to medium-term scope for a further test of its 2008 peak by the Bombay Banks Index.

Indonesia (JCI) (p&f, weekly & daily) - remains Asia's performance leader for the post-2008 crash recovery cycle. It has now nudged above the psychological 3000 level which reversed the rally last May. JCI is still somewhat overextended relative to its 200-day moving average but less so than in May. A close beneath the last reaction low at 2845 would now be required offset higher scope over the short to medium term.

Thailand (SET) (p&f, weekly & daily) - has continued to push above the psychological 800 level. It is a little overextended relative to its MA but not so much as in April, not to mention October. Underlying support from the lengthy consolidations in recent months appears sufficient to sustain sideways to higher ranging towards the 2007 peak. A close beneath 785 would be required to question this outlook.

The Philippines (PCOMP) (p&f, weekly & daily) - Another current leader of the strong Asean group, a consolidation of recent gains is underway and a close beneath 3100 would be required to significantly delay sideways to higher scope. Looking at the p&f charts for The Philippines and Thailand, political concerns have caused them to be underperform for a very long time. I do not assume that this will always be the case and this year's relative strength is impressive.

China (SHASHR) (p&f, weekly & daily) - has been described in Comment of the Day and Audio as oversold in recent weeks but suffering from oversupply in the form of huge IPOs. They are still a risk at some point but China may be switching off the tap, or at least reducing the flow of IPOs. When did we last see China rally for four consecutive days? Shortly after the February reaction low. China's Shanghai A-Shares Index is much lower today and it has seen a failed downside break recently. Some further regression towards the MA mean is the minimum upside expectation and there is an increasing chance that we saw an important low earlier this month.

Copper (HG1) (p&f, weekly & daily) - is interesting because many people regard it as a leading indicator of economic activity, "with a PHD in economics." This latter banality aside, copper had looked like the wobbly western stock markets recently, not least the S&P. However copper has rebounded very strongly in the last three days and prices for other industrial metals have firmed as well. This may affect stock market sentiment which on Wall Street recently has looked to this observer like irrational pessimism, given stimulative monetary indicators and the leadership evident elsewhere around the globe.

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