Regional Stock Market Indices Update - 21 January 2008

Malaysia: KLCI facing correction

Markets have been very volatile in the past 2 weeks and the KLCI emerges as the “hero” by breaking new highs while other regional markets were seen struggling with bearish sentiments. This is mainly due to the rising Crude Palm Oil prices. Few top heavy weights in the KLCI component are plantation stocks. However, the KLCI took a heavy beating last week after creating a historical high of 1,524.69 points on the Monday but closed at 1,439.49 on Friday.

The KLCI is still in an up trend and is currently facing a correction. Support level is around 1,400 points and the KLCI is expected to test this support level this week. If it breaks further downwards, the KLCI may find support 1,350 points. Immediate resistance is at 1,450 while the historical high os 1,525 is the major resistance which the KLCI needs to overcome to continue its up trend.

Singapore: STI may find support at 2,950

US-dependent Singapore market was bearish because of the slowing economy in the US. The stock market was not spared as it continued to move in to a bear trend channel. Mild upward rebounds were seen in the last 2 weeks but were easily overcame by the bears. The down trend channel has a support level at 2,950 points, which is also the crucial support level tested 2 times before in the span of one year. The STI may find support at this level.

Resistance from the down trend channel is at 3,300 points and this is the level where the STI needs to overcome to break itself from the bear trend.

Thailand: The SETI is expected to continue its bullish mode

Despite being in a down trend, the SETI made an impressive rebound since Wednesday last week while other regional markets are still struggling. The impending handover of military rule in Thailand to a democratic government has boost market sentiments a little, which investors see has long been ignored under the junta rule. The SETI rebounded from 760 points on Wednesday to close at 789.67 on Friday. Therefore 760 points is seen as a immediate support level for the STI.

The SETI is expected to continue its bullish mode this week with cautious because of the weak performances in the regional markets. It may find resistance at 835 points, which is the resistance line of the down trend channel.

Hong Kong: Bears taking control

The HSI correction in the past month has ended with a bearish mode. The triangle formation support line was broken last Tuesday which means that the bears are taking control. The triangle pattern breakout has a long term downside target of 20,000 points, which is also a crucial support level. The HSI has found some support at the 24,000 points level and is expected to test the triangle support line again at 26,500 points this week. Failing to go above this level may result in HSI continuing its down trend to its long term target.

US: In a down trend

As, expected the 12,700 points support level was not able to hold the bears from taking the DJI lower. The DJI closed at 12099.30 last Friday, very close to the crucial 11,900 support level. The bearish move in the past 2 weeks have confirmed the head and shoulder pattern which is normally found at the end of an uptrend. The DJI is currently in a down trend with defined channel. The DJI has to break above 12,800 level to hold the bears from pulling it lower. Therefore the 12,800 points plays a crucial resistance level. If the DJI continues to be decline and falls below the 11,900 support level, then the down trend shall continue to at 11,100 because that is where the target for the head and shoulder pattern is.