Morning Dew - 29 May 2013

Key Points

• JCI soared on Tuesday after came under pressure during prior sessions. The index fell briefly to 5072 before rallying higher to 5186.82 and settled the day at 5176.23. Technical indicators which were bearish earlier took a sharp turn as the daily candle formed bullish engulfing pattern coupled with a turnaround in MACD and supported by a jump in volume. Resistance will come next at 5209, followed by the all-time high figure at 5251.30, 5284, 5300 and 5367 while near-term support lies at 5160. More supports come at 5143 and 5129.
• We should be aware that the rout last week started when the Fed chairman Ben Bernanke dropped a hint that while the Fed won't remove its stimulus, scaling it down has been viewed as an option. Depending on the next three months of data, the Fed will consider its next move. The sources of the rally on Tuesday came from Japan and Europe instead where both central banks' officials pledged to keep their accommodative stances as long as necessary. This mismatch means that we're not out of the woods yet and that unless Fed officials pledge the same view like their Japanese and European counterparts, the downside risks still remain.

Click here to download the full update (PDF)