CASE STUDY - Is Jakarta Composite Index Forming a Double Top?

CASE STUDY – JAKARTA COMPOSITE INDEX

The following is the Chart for Jakarta Composite Index. Does it look like it is hitting a ‘Wall of Worry’ or is it a Double Top? The following are probable signs that a Deep Reversal is on the cards.

1. Resistance at 4235
2. RSI Divergence
3. MACD Divergence
4. Index making New High but not Individual Stocks. More than 95% of the stocks are trading below their Highs. That means the market is not as strong as it perceived to be. Leading issues are not following the trend and that is a sign of weakness. Big boys are on the way out. In fact when it manage to make a new high on 04/05/12, there are more down issues than up issues.

The only sign that it is not in a blow off stage is that currently there is no excessive spike in volume. Maybe a mid-term reversal? The last candlestick bar which is the last trading day on 04/05/2012 looks like a doji...

Support is around 4100. Hope it doesn’t break.  So please let me know if you have any other ideas. I would like to hear second opinions. Please pan to the right to see the whole chart.