This article was first posted onSharesInvestment on 28 June 2010.

Past performance does not promise future results but the basis of technical analysis lies on the observation of previous phenomenon.

So, Sembcorp Indstries just repeated an action that we have seen 4 other times in the past 15 months and it is now up to the investor to interpret for himself.

See the brown line in the chart? That is a 100-day moving average. Since April 2009, price has managed to find support in its vicinity. By building bases at this line, it was able to rally on. In the past 2 months, price has again managed to do just that (blue arrows). Now, a base has probably been built.

Past action hints Semcorp direction; but investor has to watch resistance

Investors interested to know whether Sembcorp Industries resumes its previous trend should now pay attention to action at resistance levels.

First published on SharesInvestment website on Monday 12 April 2010. Articles contributed to ‘Trend Spotting’ will be published here 1-2 days later.

Jaya Holdings is gathering momentum.

Chartists consider a security price to be in an uptrend when it is above its 200-day moving average (black line on chart). Jaya therefore left its downtrend and establishing an uptrend since December 2009. The momentum is increasing because shorter term moving averages are diverging.

Since leaving the 200-day moving average behind, it has displayed classic rally – retracement patterns. As of writing this article, it is going through a rally phase.

Each rally phase is characterized by high volume while the retracement level should display low volume. Each rally brings in new entrants while some take profit at retracement.

Patient investors can wait for the next period of retracement. The previous highs offer a good resistance turned support level to consider entry. Other moving averages such as the 20-day and 50-day also provide good clues.

Jaya Holdings on upward climb

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There is a confluence of supports here at this moment for the Cable. Besides a throwback to the previous resistance trendline, there is an addition of 55ma on the 4-hour chart as well as monthly and weekly pivot M2. If the 1.9600 to 2.0024 move were to qualify as a bullish wave1, the current down (potential wave2) may retrace to 1.9762 region to make a 61.8% retracement.

Weekly pivot of 99.60 may be an interesting level to watch as the 50-ma for the 15 min, 60 min and 240 min charts are now congested at around this region as well.