The STI index made a false breakup above 3,260 for several days and came back to below the resistance of 3,260. The candlestick pattern for those candles above 3,260 is not sustainable and their bullish nature was short lived. This was anticipated in the last posting 2 weeks ago.
As at 29 Apr 2014, the STI closed at 3,237 with RSI making a failure swing and MSCD crossing down below the signal line. The next support is at 3,200. Let’s see how the index react at 3,200. When it gets supported and the indicators are wearing off, signifying supported retracement, look for a high probability setup for entry.
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STI has faced with strong resistance at 3,260. The index is losing strength and will retrace in the coming week. Immediate support at 3,200 and followed by 3,155.
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On 3 Feb 2014, an economic analyst wrote an article in Forbes saying that “Singapore’s Bear Market May Have Just Begun”.
I looked at my chart and challenged his views technically. True enough, the market rebounded and turned out as what I have expected.
Just some sharing of my thoughts with you guys.
Cheers and have a good weekend ahead.
In my earlier posting on 9 Mar 14, I had mentioned that a false breakout was likely to happen and we needed to observe for 1 to 2 more trading days to confirm this. Indeed, the candlestick appearance didn’t look good on 10 & 11 Mar 14 (after my posting) and the Index fell strongly to close at 3,097 on 12 Mar 13. The drop continued and as at 14 Mar 13, the STI has reached the immediate support of 3,065 (Low of 3,060 and Close of 3,073) on 14 Mar 14. I have asked traders to take profit as early as 28 Feb 14 and reminded again on 9 Mar 14.
With the accurate forecast, I hope you have exited with some profit.
For the coming week, I would expect STI to be weak and consolidate between 3,065 to 3,120. For indicators, they have confirmed a retracement with MACD crossing signal, RSI failure break and volume dropping. If the current support at 3,065 failed, the next support is at 3,030.
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STI has broken its resistance of 3,120 on 6 & 7 Mar 2014. The resistance (3,120) has been well held for the last 11 trading days starting 19 Feb 2014.
Currently, both the RSI and volume is high, but experience losing of strength. MACD is positive but upside strength weakened. The trend is bullish, but considering all factors, it is not a strong entry as compared to the one on 11 Feb 2014, which I have mentioned in my 7 Feb 2014’s posting.
The Index has been on the up trend for the last 22 trading days. I will observe for 1 to 2 more trading days to ensure no false breakout. Traders may wish to enter/ re-enter the trade upon a pullback. As conservative traders, it will be good to take partial profit still, if you have not done so. The immediate support is at 3,065. The next target will be forecast when it is confirmed not a false breakout.
After a beautiful recovery starting from 4 Feb 14, the STI is currently at resistance of 3,100 – 3,120. I would expect the Index to take a breath and consolidate for a while before testing 3,120 again. Looking at Dow Jones peaking and HSI also begins its consolidation, it will be sometime before the Indexes gain their strength to climb higher grounds.
Traders may take some profit now.
STI has broken its 1st support on 4 Feb 14 with a low of 2,953. As the index did not continue to head towards its 2nd support of 2,900 – 2,920 for the time being, we can assume that the Index is taking a rest. Currently, we can see that it is trying its best to go above 2,990 (support turn resistance). Once 2,990 is broken and the Index stays above it for a few trading days, we can say that the Index is supported. It will be good if this coincides with MACD reaching its bottom or crossing its signal line. Once this is established and if possible, wait for a retracement back near to the support of 2,990, Traders may go in for bottom fishing with a tight stop loss.
However, if 2,990 is not broken or the Index does not hold above for a reasonable period of trading days, then we can expect market consolidation to continue with no direction. The index will hover between 2,920 to 2,990.
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Wishing Everyone Good Health and Prosperous Lunar New Year !
As mentioned in my Dec 13’s post, STI resistance was 3,200. The index had reached its high of 3,187 on 2 Jan 2014 due to window dressing and thereafter made its way down.
The 2 gaps formed in the last 2 trading days as well as its candlestick pattern showed the fierceness of the descent. MACD showed rejection at zero and just started to turn down. This confirmed that STI has begun its momentum down and more to come.
There exist a strong support at 2,990 and 2,980. This is also a psychological barrier level and we are likely to see some market reaction either with a rebound or a sideway pattern before moving on to its new direction. If this level can’t hold, we are looking at the next support at 2,920 – 2,900. Going to 2,900 is rather remote but it has happened before during extreme market conditions.
With the Lunar New Year around the corner, there will be less volume and traders will be extra cautious with many considering to liquidate their positions.
Monday (27 Jan)’s closing saw STI dived to 3,025, which coincided with a recent low in mid Dec 13 prior to the window dressing. There will some reaction here and indeed on Tuesday (28 Jan), we saw price bumped up to 3,062. But looking at the momentum, the outlook is not positive.The new resistance is at the region of 3,155.