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Wednesday, November 26, 2008

Technical Versus Fundamental Forecasting / 综合指数 2008年 11月 25日 / Composite Index 25/11/2008

Technical Versus Fundamental Forecasting by Zhuge Liang


Just as in economics, fundamental analysis looks at economic forces of supply and demand that cause prices to “move higher, lower, or stay the same.” Technical analysis/charting focuses on the study of market action. People disagree about which of these two approaches is better. But remember, both approaches attempt to solve the same problem – the “direction prices are likely to move. They just approach the problem from different directions”.


“The fundamentalist studies the cause of market movement, while the technical analyst/chartist studies the effect. The technician, of course, believes that the effect is all that he or she wants or needs to know and that the reasons, or the causes, are unnecessary. The fundamentalist always has to know why.”

Pictures, and therefore charts, really do tell a thousand words. Quite simply, I would much rather process what the chart is telling me in the blink of an eye, than read those thousand words.


综合指数 2008年 11月 25日


亚太股市普遍上回弹,综合指数也不例外,上扬4.79点。如图中箭头A所示,综指当前的阻力水平是887点的胜图自动费氏线,支持水平则依然是800点的胜图自动费氏线,由于这也是综指跌破头肩顶颈线(Head & Shoulders’ Neckline)的下调目标,所以支持力量预料倍增。

如图所示,布林频带(Bollinger Band)并未打开反而收窄10%,所以综指避开了进一步下跌的困境,惟综指始终是处于布林中频带(Bollinger Middle Band)以下,所以综指还未能算是出现转强的讯号。通常综指是必须先上扬突破布林中频带,综指才能算是开始有出现转强的迹象。

如图中箭头B所示,成交量稍微减少1.3%,使到成交量仍然低于40天的成交量移动平均线(VMA)的水平。无论如何,成交量低于40天的平均值在布林频带收窄时是正常的,这是因为在综指横摆巩固或调整时,投资者在走势并不明朗时选择离场观望所致的。

如图中C圈指示,随机指标(Stochastic)在周一跌破10%而发出短期超卖,这使到综指出现了技术反弹。如周一提到一样,综指目前这只能算是一个纯技术反弹,直到随机指标能成功上扬突破30%为止。

总的来说,综指出现了技术反弹,在加上布林频带收窄而使到综指走势避免进一步的恶化。综指接下来的后市将继续的受到国际市场的影响,不过若综指能上扬突破布林中频带的话,那综指后市才有出现转强的讯号了。

Composite Index Daily Technical Analysis 25/11/2008

On Tuesday, the KLCI rebounded 4.79 points as overall Asian markets ended higher. As indicated by A, the resistance for the KLCI is still at 887 Fibonacci Retracement while support remains at 800 Fibonacci Retracement. Since the 800 level is the target of the Head and Shoulders after breaking its neck line, it would be an important support level for the KLCI.

As shown on the chart, the Bollinger Bands Width contracted 10%, suggesting the KLCI fluctuation is getting lower, thus a signal suggesting a consolidation. But still, the KLCI would have to break above the Bollinger Middle Band in order to regain its positive position.

As indicated by B, total market volume declined 1.3%, with volume remain below the 40-day VMA level. Since the KLCI is consolidating, the lower volume is generally considered normal. However, if the KLCI should attempt to break above the 887 resistance or the Bollinger Middle Band dynamic resistance, more volume is needed to confirm its breakout.

After breaking below 10% level, the Stochastic rebounded as the short term movement of the KLCI was over-sold. But still, the Stochastic has to break above the 30% level successfully in order to break away from the short term bearish region.

Generally, the contraction of the Bollinger Bands Width has temporary paused the KLCI from falling futher. Still, the performance of the KLCI is highly affected by the performance of other major markets across the world. We shall continue to monitor the Bollinger Middle Band, as it would be the initial signal of any positive sign for the KLCI.

HAPPY INVESTING

3 comments:

Ivan said...

Zl,

Base on your post at 19.26, the KLCI 5 min chart show that the index adi brekadwon the support level.

May I know how you know the enter area shall be at 849?
Did you mean you see a long green light candle, mean is a good sign to enter?

While for the FKLI, how you know is at the 856?

Thank you

Zhuge Liang said...

Ivan .... From ZL KLCI 5 mins chart posted, prices descended fast and formed 2 little "spinning tops" just b4 11.00am. Spinning Tops (ST) = DIRECTION UNDECISIVE. The 2 ST appeared on LOW VOLUME which sais the SELLING had faded. The next green candle hv even lower volumes that depicts buyers are bargain hunting and little or no resistance from SELLERS. The buyers queue in from that point including ZL.

Another vital decision making factor was when KLCI 849++ called was made >>>>> FKLI was in PREMIUM and the KLCI steep decline had little or no effect on FKLI.

Check out all 3 charts KLCI / FKLI / FCPO >>>>the calls came spontaneously together ..... Entry point highlighted. Check their imes, price, volum and Stoch / macd actions. A picture speaks a thjousand words???

TQNM

Ivan said...

d) I saw your analysis on daily TA, is alike same with Sinchew paper...Are you help sinchew to analysis it on daily basic?

e) resort is solid but what is the good enter price?

finish study today. ..

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