Market Trend

Between September 8, 2008 to September 19, 2008, the MCI index declined from 5820.0 to 5733.5, down by 86.5 points. Compared to the sharp falls during the past few weeks, the MCI index is showing signs of stabilizing. Panel prices are also exhibiting the same trend, as the drops have grown more moderate for the second half of September, especially in the IT segment.

Meanwhile, with the various bail out plans being made on the troubled financial institutions, it should help stabilize the volatile financial markets that were sharply impacted last week. This should help allay fears of further deterioration in the credit crisis and to a larger extent the general macroeconomic environment.

Thus, WitsView believes the traditional seasonality of the third quarter should continue to help stimulate the panel demand. A key signal to observe now is whether the MCI index can rise past the 20-day average, which has been a resistance level in the past month or so. From the graph below, the MCI index twice approached very close to the 20-day average, but was unable to break past it. At the moment, the index is only 3.5 points lower than the 20-day average. If the index can rise past the 20-day average and stay firmly above it this time, it will raise the possibility of seeing the index returning above the 6000 level, thereby moving up from the current “Very Low Confidence” to the better “Low Confidence” scale in the near future.