A Trader's Journal
DJI, HSI and STI
Look at how beautiful the true supports are. The STI had shown reaction near 3,160 and 3,060 respectively. No confirmation of a reversal until a higher low has been form. The supports were forecasted in my blog 2 weeks ago. =) Cheers !
STI has broken the strong support with a big gap down and high volume, closing at 3,202 on Friday 31 July 15. The sell down was really fast and furious although on that day, Hang Seng and Shen Zhen composite Index were fairly stable. It was revealed that the hugh sell down was led by Noble, which was given a warning by SGX. Looking at the volume and magnitude of the sell down, I would expect the down trend to continue for quite a while more and in view of the coming National Day week, it will be worsen when approaching the public holidays.
The next 2 support zones are in the regions of 3,160 – 3,130 and 3,060 – 3,030. We shall see how STI reacts near these regions before making any trading decisions. If you have taken profit / cut losses, do stay in the side line.
STI has been suffering from macro economics factors. It has been in RED for the past straight 7 trading days. There is a strong support is at 3,230. I would expect there will be some reaction around that region and we shall see if the Index gets supported or the free fall continues. At the moment, the Index is having a down trend.
The support is simply fantastic. Do not short, when it is near support. For intraday trading, look for hourly signal to long when near support. Current candlestick pattern shows indecision. Traders can choose to stay on the sideline until clear signal appears. Wait for a few candles to appear as candles are still stuck along diagonal neckline (not drawn).
Last week’s comments for reference – (Written on 1 Oct 14)
“STI Index is currently making a long awaited downtrend. Support 1 is at 3,250 followed by Support 2 at 3,220. Candlestick pattern reveals the weakness of the Index and the turning down of MACD supports further downside. Traders to observe RSI break and market reaction at the 2 Support levels to detect reversal.
If the break of neckline (not drawn) of the double top formation is realised, then we are looking at medium term downtrend and reversal will not be so soon.”
完节
STI Index is currently making a long awaited downtrend. Support 1 is at 3,250 followed by Support 2 at 3,220. Candlestick pattern reveals the weakness of the Index and the turning down of MACD supports further downside. Traders to observe RSI break and market reaction at the 2 Support levels to detect reversal.
If the break of neckline (not drawn) of the double top formation is realised, then we are looking at medium term downtrend and reversal will not be so soon.
World Cup Fever and market moving sideways.
Support @ 3,220 / Resistance @ 3,312 – Rectangle Pattern
The STI has been resisted at the level of 3,260 for several times and the resistance continues to be a fairly strong one. Technically, STI is currently trading a rectangle pattern for the past 4 weeks with the top at 3,285 and bottom at 3,220. I would expect this this tight trading range to be broken soon. However, it is still hard to say whether it will break above 3,285 or remains in the trading range for a while longer.
As you can see, the signals from MACD and RSI are conflicting as the index is currently not in trend. Hence, it is always recommended to look at real market actions instead of indicators.
Given the imminent release of corporate results, it seems that there are more potential upsides for Index.
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.
photo credit: Eustaquio Santimano via photopin cc
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.
photo credit: kenteegardin via photopin cc
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.
Jayson's Financial Trading 