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FINANCIAL CHRONICLE™ » CHRONICLE™ ANALYTICS » Could ASI hold the previous support line?

Could ASI hold the previous support line?

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gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
[You must be registered and logged in to see this image.]

Its bang on the previous support on the 23rd sep, 5th oct and Jan 12th. Lets see if this does act and change the trend atleast temporary.

Quibit


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Hey Gann,

Your Chart is wonderful.. I have been following RMO trading module and applied to the ASI. All 3 indicators supposed to be positive. But up to yesterday 2 indicators were positive and one was negative. Today the blue trend line turned red indicating bearish sign and further downside of the market.. Now it's 2 against 1. It's bad news!!

I want to post this chart on the forum but I cannot take a screen shot of the chart becos my wireless key board does not have a separate key for screen shots. Moment I learn how to take a screen shot, I will post my chart here.

Further, I have noticed a very strong buying signal on KAPI (MTD Walkers). Very strange under the current market conditions. Appreciate if you could enlighten me on that.

Quibi

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@gann wrote:My worst case scenario is ASI reaching 6500 levels in first half of April if this support does not hold.

What is the source of your data? In my chart (from CDAX data) and also on Bloomberg, the ASI is trading below the lower bollinger band. http://www.bloomberg.com/apps/quote?ticker=CSEALL:IND#chart

Or perhaps could it be that your chart program uses the EMA instead of the SMA when drawing the bands?

Analytic

Analytic
Equity Analytic
Equity Analytic
I thought I will share my technical analysis on the market with you and appreciate your thoughts on this.
 
Set Up – The market is approaching Fibonacci retracement level of 61.8%. It is unlikely that market will go further beyond this level however it is a possibility. The level is 6900. All three oscillators are either in oversold region of approaching oversold region. Both Williams %R and  Stochastic Oscillator are into the deep oversold territory. RSI, the most popular one is 35 and approaching oversold territory. There is still chance that this could go down.

Trend – The trend is downward and reversal must be a upward trend.

Confirmation – The upward confirmation is still not there. Hopefully we will see it during this week. Both 7050 and 6900 levels are good support levels and 6900 will be very tough to break and we will need to decide confirmation at 6900. However all indicators are point to somewhat correction in the coming days.
 
What do you think? What would be the attractive sectors if market is going to move up?

http://www.srilankaequity.com

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@tubal wrote:
@gann wrote:My worst case scenario is ASI reaching 6500 levels in first half of April if this support does not hold.

What is the source of your data? In my chart (from CDAX data) and also on Bloomberg, the ASI is trading below the lower bollinger band. http://www.bloomberg.com/apps/quote?ticker=CSEALL:IND#chart

Or perhaps could it be that your chart program uses the EMA instead of the SMA when drawing the bands?

I use 20 SIMPLE 2 DIVIATION for confirmations from BOLLINGER BANDS

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Quibit wrote:Hey Gann,

Your Chart is wonderful.. I have been following RMO trading module and applied to the ASI. All 3 indicators supposed to be positive. But up to yesterday 2 indicators were positive and one was negative. Today the blue trend line turned red indicating bearish sign and further downside of the market.. Now it's 2 against 1. It's bad news!!

I want to post this chart on the forum but I cannot take a screen shot of the chart becos my wireless key board does not have a separate key for screen shots. Moment I learn how to take a screen shot, I will post my chart here.

Further, I have noticed a very strong buying signal on KAPI (MTD Walkers). Very strange under the current market conditions. Appreciate if you could enlighten me on that.

Quibi

KAPI chart looks like its a manipulated share. not ideal for technical analysis.

I must thank you for bringing my attention to many developments in the market. I usually monitor only 3 to 5 stocks.

milanka

milanka
Vice President - Equity Analytics
Vice President - Equity Analytics
@Quibit wrote:Hey Gann,

I want to post this chart on the forum but I cannot take a screen shot of the chart becos my wireless key board does not have a separate key for screen shots. Moment I learn how to take a screen shot, I will post my chart here.

Quibi

Quibi - There is a utility tool called as Sniping tool . it is easy to use and with that it is not necessary to have the Print screen Key.

The Sniping tool is not available in Windows Vista Home Basic Edition. It comes with Vista Home Premium, Business, Enterprise, or Ultimate Editions and also with Win 7 editions.

Hope we could see your Graph soon..


http://forum.srilankaequity.com/u188

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
As predicted the support line did give the support we all needed. I would be cautiously watching how the asi acts in the 7350-7400 regions.

StocksWatch


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@gann wrote:As predicted the support line did give the support we all needed. I would be cautiously watching how the asi acts in the 7350-7400 regions.

I have a feeling that ASI may drop to 7000 region before end of this month and will again kick-off towards early April. What do you think gann?

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@StocksWatch wrote:
@gann wrote:As predicted the support line did give the support we all needed. I would be cautiously watching how the asi acts in the 7350-7400 regions.

I have a feeling that ASI may drop to 7000 region before end of this month and will again kick-off towards early April. What do you think gann?

ASI is a value weighted price index. Not a Capitalization-Weighted Index.

Here is the definition.
What Does Price-Weighted Index Mean?
A stock index in which each stock influences the index in proportion to its price per share. The value of the index is generated by adding the prices of each of the stocks in the index and dividing them by the total number of stocks. Stocks with a higher price will be given more weight and, therefore, will have a greater influence over the performance of the index.


I think ASI and MPI has a more psychological effect than anything else on the speculators. You have to assess each individual stocks price retractions and selling volumes to get the bottomed up prices Smile

I suspect WAPO is used as lever by authorities or interested parties to paint green or red to put off the investors. Check the period from 13th jan to march 11th of wapo prices. you will understand what i mean.

I have not used points during the wako wapo period to draw the support line. One step ahead of the game Wink


gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
[You must be registered and logged in to see this image.]

The above chart would conform my point. ASI against WAPO(Candles) Observe the price of wapo during that period.
First half was used to dump their stock at higher prices before the market crashed. Then on the second half they let wapo go down to show the real market situation in red. Panic selling and clearing is well timed. Started collecting at bottomed up prices.

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Very informative gann, u deserve a plus for the hard work Wink

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@gann wrote:
@StocksWatch wrote:
@gann wrote:As predicted the support line did give the support we all needed. I would be cautiously watching how the asi acts in the 7350-7400 regions.

I have a feeling that ASI may drop to 7000 region before end of this month and will again kick-off towards early April. What do you think gann?

ASI is a value weighted price index. Not a Capitalization-Weighted Index.

Here is the definition.
What Does Price-Weighted Index Mean?
A stock index in which each stock influences the index in proportion to its price per share. The value of the index is generated by adding the prices of each of the stocks in the index and dividing them by the total number of stocks. Stocks with a higher price will be given more weight and, therefore, will have a greater influence over the performance of the index.


Sorry to disapoint you my friend but the ASI is a capitalization weighted index. Here is the definition on the CSE site: http://www.cse.lk/sectors/home.htm

There is no doubt that the index rebounded from the support level. However what happened afterwards is what most people are having doubts about.

Also I would appreciate if you could clarify the bollinger bands question I posed earlier. How come your ASI is above the bollinger band while the one one bloomberg and one based on CDAX data dipped below the lower band. I know you did say "I use 20 SIMPLE 2 DIVIATION for confirmations from BOLLINGER BANDS" but bloomberg and most everything else does the same thing. So appreciate if you could kindly clarify.

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
for instant take seylan bank price which is trading at 72. last time seylan was 72 was back in sep. the asi was around 5700. which implies asi has dropped that much in relation to seylan.
you could use the same logic to any other stock.

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@tubal wrote:
@gann wrote:My worst case scenario is ASI reaching 6500 levels in first half of April if this support does not hold.

What is the source of your data? In my chart (from CDAX data) and also on Bloomberg, the ASI is trading below the lower bollinger band. http://www.bloomberg.com/apps/quote?ticker=CSEALL:IND#chart

Or perhaps could it be that your chart program uses the EMA instead of the SMA when drawing the bands?

Index might have just passed the lower Bollinger lines.. Also RSI, ROC, all are in an upward trend.. Stochastics is in deep oversold region trying to come up.. So this seems like an uptrend...
Lets see what CSE has in stock 4 us Wink

duke


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
so technical analysis cares nothing about company profits, price to earning ratio, rights issues, inflation, floods, credit... it only cares about the price and the volume. in the last 2 years colombo stocks have doubled twice. it seems CSE shares have completely detached from the companies they represent. that's why CSE went up while the whole country was affected by floods. on the other hand people watch the charts in software and think it's over bought or over sold and react to that. what do you think about this situation?

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@tubal wrote:

Sorry to disapoint you my friend but the ASI is a capitalization weighted index. Here is the definition on the CSE site: http://www.cse.lk/sectors/home.htm


here is the same definition on the cse glossary
http://www.cse.lk/static/Glossary.htm

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
@gann wrote:
@tubal wrote:

Sorry to disapoint you my friend but the ASI is a capitalization weighted index. Here is the definition on the CSE site: http://www.cse.lk/sectors/home.htm


http://www.cse.lk/static/Glossary.htm

So it does seem like there are two contradictory definitions on the CSE site itself. Typical!! however the declation at http://www.cse.lk/sectors/home.htm is the correct one. As proof, i ask you to look at the CSE home page which shows the contributors to the days ASI change. DIAL an 11 rupee share had the same contribution as a BUKI an 1,100 rupee share.

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@duke wrote:so technical analysis cares nothing about company profits, price to earning ratio, rights issues, inflation, floods, credit... it only cares about the price and the volume. in the last 2 years colombo stocks have doubled twice. it seems CSE shares have completely detached from the companies they represent. that's why CSE went up while the whole country was affected by floods. on the other hand people watch the charts in software and think it's over bought or over sold and react to that. what do you think about this situation?

Fundamentals are there to keep us sane. markets does not operate on fundamentals. key is to identify greed,fear and hope in the price fluctuations Wink

Technicians use different methods to identify human emotions. Overbought / oversold readings are good confirmation signals. but you cant trade on those. Wink



Last edited by gann on Thu Mar 17, 2011 10:59 pm; edited 1 time in total

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@tubal wrote:
@gann wrote:
@tubal wrote:

Sorry to disapoint you my friend but the ASI is a capitalization weighted index. Here is the definition on the CSE site: http://www.cse.lk/sectors/home.htm


http://www.cse.lk/static/Glossary.htm

So it does seem like there are two contradictory definitions on the CSE site itself. Typical!! however the declation at http://www.cse.lk/sectors/home.htm is the correct one. As proof, i ask you to look at the CSE home page which shows the contributors to the days ASI change. DIAL an 11 rupee share had the same contribution as a BUKI an 1,100 rupee share.

regardless the wapo effect is there since they do not use the trading volume into account.

about the bollinger bands... i usually use the standard simple 20 2 . but some times i try diff values to curve fit.

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