Trendlines

A lot of perceptions in trendline drawing these days, some people say that drawing trendline only valid at the closing price, the other one say at the shadow.

Personally, I draw trendline at the shadows as it gives more confirmations as we must be more detail, but we're not going to talk about it. I'm going to discuss of how to draw a trend line. First of all, we must see the big picture of the chart, whether it is an up trend or down trend, then we must know the time horizon of our trading whether we are a weekly trader, monthly or a very long term trader.

Secondly after a time series has been used, then we can start to see where is the bottom & top, usually support trendline is drawn at the bottom & resistance trendline is drawn on top, which finally create a channel or sometimes can create a pattern. Drawing trendline may not start from the left to the right but from the right to the left, as we're looking at the most recent data. See the example below:

Daily Chart, short-term horizon

Weekly Chart, mid-term horizon

Happy Investing^^
Disclaimer ON!!!

JKSE Update

After closing the week at intraday high, JKSE seems to be consolidating at this moment with a tendency of declining, with a lower selling pressure the index seems to be declining slowly but will not affect some defensive stocks that we can collect at this moment before our index continues its rally for the upcoming months. As investors are now allocating their money at safer instruments, stocks market were rushed weeks ago which caused the stock market to be going down.

As a lot of big investors has exited the market & still waiting for the Indonesian Bank to announce the rate in February, January seems to be a consolidation time for our market but not for some stocks especially some stocks which are believed to have good performance in 2010. I believe that after the announcement of the BI rate, our market will get back to the track soon as the capital inflow will continue to come to Indonesia as one of the emerging market which has good growth in economics.

Technically, I see that our index has just finished its pattern of triple top or double top and I believe that the tendency of market sell-off is still exist but not as big as previous weeks, that's why I said it seems to be consolidating until the interest rate has been announced. There're a lot of predictions published by analyst that our interest rate will have a hike at 25-125bps, which will make oiur interest rate become around 6.75-7.75%.

Here's the chart we can see:

Rating: Hold; Target: 3275.48 - 3283.85

The stock list will be published tonight or tomorrow morning, a lot of stocks to be watched & expected to rally later on.

Happy Investing^^

Disclaimer ON!!!