Last Close (Jan 3): 97.11, off 0.68 of a point from a week ago. Weeks high: 98.50 points; Weeks low: 96.80 points.
The Second Board Index (SBI) established new year's lows in the dying minutes of 2002 and further eased to close the week at its lowest in 13 months. Lack of speculative and investor confidence allowed the index to drift lower as players were more keen to square off positions ahead of the New Year amid an uncertain geopolitical situation.
Based on chart, the SBI remains bearish and is expected to continue with its sideways-to-lower fluctuations this week. Chart support for this week is seen at the 94.0096.00 levels. Violation of this immediate support could pressure the index lower and cause it to trend towards the minor chart support level below 90.00 points. Chart resistance for this week is adjusted lower to the 98.00100.00 levels.
The daily and weekly technical indicators closed the week bearish and called for more sideways erosion this week.
The 3- and 7-day simple moving-average price lines: The 3- and 7-day simple moving-average price lines retained their sell signal and indicated the downcycle is continuing. The 3-day MAV-line closed the week below the 7-day MAV-line at 97.34 and 97.68 points respectively.
Daily Stochastics: The daily stochastics triggered the sell signal on Jan 3 and signalled the start of a downward wave. The daily oscillator per cent K settled below the oscillator per cent D at 37.12% and 41.87% respectively.
The weekly stochastics remained negative for the near term and indicated further downside trading in the index this week. The weekly oscillator per cent K ended below the oscillator per cent D at 6.26% and 6.81% respectively.
Daily Moving-Average Convergence/Divergence (MACD): The daily MACD triggered the sell signal on Jan 2 and closed Friday negative. The daily MACD and trigger-line closed lower in the negative territory at minus 1.07 and minus 1.06 points respectively. Based on the daily MACD reading, the index could trend lower this week.
The weekly MACD failed to flash the sell signal last week and ended with its buy signal intact. The weekly oscillator MACD and trigger-line ended slightly lower at minus 5.71 and minus 5.82 points respectively.
Daily Relative Strength Index (RSI): The daily RSI fell from a week's high of 34.25 points on Dec 31, 2002, and closed the week higher at 27.39. Analysis of the daily RSI indicates the index is still in an oversold position. A successful move above the 30-point mark this week would indicate a cycle-reversal has started.
The weekly RSI eased slightly and ended lower at 26.13 points. Analysis of the weekly RSI signals the index is in an oversold position.
Daily Momentum Index (MI): The daily MI (see chart) closed the week slightly lower in the negative territory at 98.27 points. Analysis of the daily MI indicates the immediate momentum of the market is bearish.
The weekly MI remained negative at Fridays close and ended lower at 94.92 points. The weekly MI indicates the near-term markets direction is south.
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