Market Outlook as at July 18 2006

As at 12.00 noon, the CI has jumped by 8.98 points to 911.68. Gainers out-numbered losers by 487 to 113. Volume of shares traded is 427.7 million units.

I view the current market action as a mere re-bounce since its short-term uptrend has already broken. You may also note that the MACD indicator has also done a negative crossover, which is a SELL signal. The immediate resistance is at 913, where the market may close the gap created yesterday (July 17). Thereafter, the next resistance will be at 919/920 levels (see Chart below). I believe this re-bounce is likely to run out of stream between the 913 & 920 levels. As such, I would recommend those who are overweight the market to sell into this rally.