STI - breakout finally?

Hi there! I have not been updating my blog lately as the market has been pretty dull; low volume and generally trading sideways. Today, the market broke above the 2745 major resistance (intraday). (Please see above daily chart). If the STI can close above this level today, it could signal the start of a more sustained rally. Traders could go long on a 'breakout trade'. Cut positions if the STI closes below 2700.



Please see STI's weekly chart for a slightly longer term view. The STI managed to close above the 50% fibonacci retracment level of 2691 last week (good sign) and appears to be breaking out of major resistance of 2745. I think the STI will head towards the next fibonacci level of 2978 (61.8% retracement level) rather rapidly. However, now we are close to the holiday season, in which the market is generally quieter. So it may take some time before the STI reaches the next fibonacci level.

Till the next update - have a good day!

STI - breakout soon?

Hi there! Above is a weekly chart of the STI. It closed above the 50% fibonnaci retracement last Friday. This is a very good sign. Major resistance remains at 2745; if the STI manages to close above that level, there is a good chance that it will move strongly towards the next Fibonacci level, which is at 2984.

I think a good strategy now would be to accumulate on weakness.

STI: still range bound

Good morning, in the above chart, i attempt to show the key levels for the STI. Key resistance is 2745, 50% fibonacci retracement is 2961 and lower bound of the range bound trading for the past 3 months is 2548.

In my last blog entry, I expressed discomfort at the way the STI has been trading for the last 2-3 months. My main reasons are the bearish divergence between the STI and its MACD and the decline in the MACD over the past 2-3months while the STI has been rather flat.

My view has changed after observing that the STI managed to break the psychological barrier of 2700. It has come down somewhat over the past 2 days, but it looks like a break above 2745 is coming soon.

I would suggest traders go long during pull backs, but close positions should STI fall below 2548.

Major correction for the STI?

I am getting increasingly uncomfortable with how the market is behaving lately. The STI has been stuck in a 2548 to 2700 trading range since mid Jul 09 and the range looks to be getting tighter. I drew two trend lines on the daily candle chart of the STI; one on the price chart and the other on the MACD chart. While the STI was trending higher from Jun to Aug, the momentum, indicated by the MACD chart, failed to reach a higher peak. This is what chartists call 'bearish divergence'. Going forward from August, we can see that while the STI is holding up in her sideways rangebound trading pattern, the momentum was dropping steadily. To me, this is not a good sign.

I also observe heavy interest in penny stocks as retail investors look to be chasing stocks that suddenly exhibit heavy volume with high percentage gains. This is also another dangerous sign.

For those of you who are not in the market yet, i suggest to wait and see.

For those of you who are short term investors, do try to take profit when possible. If the STI should fall below 2548, i think you should get out.

update on sti

Hi there! I am not sure what is going on, but the market sentiment has turned extremely negative. Above is a weekly snapshot of the STI since 2007. The STI has gained 50% since it's low at Oct 08 and Mar 09, and it appears to have hit a major resistance of 2700. The STI has been range bound since Jul 09, trading between 2700 and 2544 for the past 10 weeks. A break below 2544 could see the STI testing 2400, while a break through 2700 could see the STI heading towards 3000 points. Chances are, the STI is going to test the 2544 support first as the momentum is coming down at the moment.

For the more adventurous out there, you could buy on dips and hope the market rebounds off the 2544 level. Cut loss once the STI closes below that level. Take profit when the STI goes close to the 2700 level.

For the more conservative ones, you may want to wait till the momentum shown by the MACD starts to turn up.

Updates on the STI

Hi there! Above is a weekly 'line-on-close' chart of the STI. I zoomed it pretty close so that you can see that it has just about broken out of its trading range. Volume is picking up also, so i think upside potential is pretty strong.




Above is a daily candle stick chart of the STI. The 2700 level still seems to be pretty strong resistance, but looking at the momentum via the MACD, it looks like it will be broken very soon.

weekly update of STI

Good morning, just a quick update on the STI. Above is a weekly line-on-close chart of the STI. I decided to use a line chart this time instead of a candle chart to illustrate that the STI has been range bound for the past 5-6 weeks. The upper boundary is at 2647, while the lower boundary is at 2538. So what do we do? For a medium term investor, i would suggest getting out of the market if the STI closes below 2538. If the STI manages to reverse and to close above 2647, then it is safe to get back into the market.

Weekly update of the STI

Above is the weekly chart of the STI. After hitting a high of 2700 three weeks ago, it has retraced to close at 2544. Momentum is weak and i suggest closing all your long positions if the STI closes below 2449.

US markets closed quite strongly on Friday so the STI should open up on Monday. But other than that, we need to see how our regional markets trade as the day unfolds.

For those still at the sidelines and with a longer term view, I would suggest waiting for the STI to breakabove 2700 before entering a long position.

update on STI

Above is a daily chart of the STI. After bouncing off 2223 level three times, it finally managed to go above its moving average line and towards its upper Bollinger Band. Its MACD has also cut above its signal line and the moving average line is also turning up. All signs of a continuation of an uptrend.



Here is a weekly chart of the STI. After trading sideways for about 5 weeks, the STI finally closed above its previous high of 2424 recorded 6 weeks ago to end the week at 2434 and on increasing volume.

My conclusion is that it is safe to go long on stocks again.

STI - bear market rally or bull market consolidation?

The behavior of the STI in Jun 09 was pretty disappointing after the super run up in May 09. I spoke to someone who believes that what happened during that past few months was not the start of a bull market, but only a bear market rally, so i had another look at a monthly STI chart (attached above). What this chart tells me is that the longer term trend, represented by the slope of the moving average, is still down. Momentum, as indicated by the slope of the MACD is turning up, but until the STI manages to cut above the moving average and the slope of the moving average line turns up, we are still not in a long term bull market yet.



Above is a weekly chart of the STI. Since Jun09, the STI has been stuck in a sideways trading range, with a slight downward bias. Support is at 2223 and if the STI goes below that, i think you should close all long positions and wait for a trend to re-emerge. The one consolation i can see is that the downward drifting of the STI is on rather low volume. That means no major sell-off, which is good, but do pay attention to how the market unfolds in Jul09.

STI - an update

Hi there! Here is the daily chart of the STI. The value of the index has rebounded off its support of 2223 and closed just below its moving average line. The MACD has stopped falling and has leveled, but the MACD histogram has started to turn up. The moving average line is still flat. Overall, the overall market as represented by the STI is now sideways. The close of the STI on Friday off its high is not that positive. Perhaps traders prefer to take profit from the three-day run up and before the weekend. I think its best to stay in the sidelines until the trend is more firm.

update on STI

Hi there. It has been about a month since my last update. The outlook based on STI's daily chart is not so good. Signs of trouble came when the MACD started to fall at about 11 May 09. However, a few days later, it managed to gap up and prety much stayed above the 2223 level since then. The negative signs are firstly, the down trend of the MACD, secondly, the index is below the moving average of it Bollinger Band and thirdly, the slope of the moving average is flattening. One plus point is that the STI managed to bounce off support at 2223. I think it would be best to stay aside for now and see where the STI goes during the following week. If it manages to turn around and to close above its moving average, that would be good. If the MACD turns around and cuts the blue line on its way up, even better; that would be the signal that the uptrend has resumed.

Daily STI - update

Hi there! Market was pretty volatile during the last week. So far, the 2245 level has been proving to be pretty tough level to break. Last week, the STI looked in danger of a trend reversal when the MACD almost crossed. It has since bounced off and looks like it may try to cut downwards again. But volume was pretty light during the last two trading days, so it looks like a case of profit taking. The trend is still up and the most recent candlestick looks like a bullish engulfing pattern. So i would say that its still quite safe to continue holding on to your long positions.

COSCO - an update

Here is a daily chart of COSCO Corp. You should notice by now that this chart, and the daily chart of Capitaland, are all very similar to the daily chart of the STI. So you can get a pretty good picture of the general behavior of the market by looking at the behavior of the STI. And like Capitaland, the price of COSCO has fallen close to its support at $1.70 after breaking strongly out of it 6 market days ago. And again, i would suggest getting out of COSCO if it breaks below $1.70 and to wait for the uptrend to be established before buying in again.

Capitaland - support holding?

Here is a daily chart of Capitaland. I suggested sometime ago to buy when it breaks out of $3.00. However, over the past 8 trading days after the breakout, it has been steadily losing momentum (as seen by the falling MACD). If the price of Capitaland breaks below $3.00, i would suggest to stop buying or cut loss, and to wait till the uptrend resumes.

STI - losing momentum

STI failed to breakthrough the 2245 level and is current hovering just above 2135 (the low made 3 trading days ago). The MACD has turned down and is just about to cut its own EMA line (the blue line). If the MACD does cut its EMA, then i would suggest to stop buying anymore equities and to wait till the momentum turns up again before buying. I think it would also be prudent to take profits or to cut losses when this happens.

STI - daily update

The STI has been behaving strangely these past 2 days. Looking back, there was a bearish engulfing pattern on Monday. That was a potential reversal signal, but over the next two days, the index did not close below the low of the bearish engulfing pattern. So it wasn't a very strong reversal signal. The market tried to rally today, but was pulled down by heavy selling in the late afternoon. Looking at the Western indicators, the slope of the SMA (simple moving average) is still up, the slope of MACD is also up, but the histogram is coming down (indicating a decrease in momentum). Overall, the trend is still up, but those trading on a shorter term basis may want to be a bit more cautious due the high volatility of the current market condition. I suspect that the index may want to move closer to the SMA before bouncing off it (like what happened in late Apr 09).

Noble Group - weekly update

Noble Group is a major supplier of agricultural, energy and industrial products. Like the behaviour of companies affected more directly by the financial crisis (such as banks and property companies), the bottom of Noble Group's share price was reached in Oct 08 when the whole world was gripped by panic amidst fears of a global financial meltdown and global recession. However, unlike banks and property counters, the price of Noble Group has reversed sharply from its lows and has been trending steadily up since. The share price is now sharply higher after it broke through a major resistance level of $1.43. It has just broken through another resistance of $1.66 and i think the next target of $1.86 should be hit soon.

All we have been reading in the newspapers lately are stories of doom and gloom, with lots of fussing over the state of America's economy, housing market, banks, auto companies and in Singapore about retrenchments and the shrinking economy. But do take a step back and have a look at how the share prices of major companies in different sectors (eg: commodities, oil & gas, palm oil) are behaving . The future does not appear to be so bleak.

STI - weekly update

For this week's update of the STI, i decided to display a line chart instead of a candle chart in order not to clutter up the chart and to show you what is happening now and is likely to happen in the near future.

Just to recap, STI fell from its peak of about 3900 in Oct 07 to around 1600 in Oct 08. It then traded in a parallel consolidation pattern before making a new intraday low of 1454 in Mar 09. After that, it managed to break through the upper band of the consolidation trading range of 1850 and finally through a major resistance of 1960. From this point onwards, there are very little major resistance levels. I drew one at 2245 because there was a bit of consolidation around that level in early Oct08. The next major resistance level that i see is at 2745 (based on the major low in Mar 08). So based on what i see on the weekly STI chart, the mid-term trend is up and i think one should trade on the adage 'the trend is your friend'.

Noble Group - Brokeout of $1.43

One counter which has just broken out of major resistance is Noble Group. From the chart above, you can see that the MACD lines have just cut, giving a buy signal. Also, the price closed above the resistance of $1.43, thus giving us two buy signals for Noble group. Volume is also much higher than that of the previous week, confirming strong buying support for the move up. The next resistance is at $1.66.

Capitaland - Poised to breakout of $3.00

After its failure to breakthrough $3.00, Capitaland consolidated over the past 2 weeks and looks poised for another attempt to breakout of $3.00. MACD also looks poised to give a buy signal (red line crossing blue line). I would suggest to go long for Capitaland upon successful breakout of $3.00.

STI - breakout from 1960

Today, STI broke out from a major resistance level of 1960 to end up at 2028. Uptrend for medium term is still maintained. Next possible level of resistance is 2245. Major resistance is at 2745.

Capitaland - ready to reverse?

The share price of Capitaland has been dropping steadily since its failure to close above $3.00 on 16 April 09. It has fallen through a rising window's support at $2.66 and is now poised just above another rising window, with support at $2.53. The candlestick formation today looks like the start of the formation of a morning star. For this three-candle formation to be confirmed to be a morning star, the candle on the next day must be a white candle closing above $2.66. The situation based on Western technicals does not look so promising. The MACD lines have crossed downwards. The share price has also fallen below the simple moving average line. These two indications mean that the short term trend of Capitaland is down.



Above is a weekly chart of Capitaland. The medium term chart of Capitaland is still up but its upward momentum is slowing. The only plus point I can see here is that the fall in share price is accompanied by a fall in volume, so it may be that people are simply taking profit. I would suggest waiting for the short term down trend to reverse before taking a long position (buying) Capitaland.

STI - Piercing Pattern?

The behaviour of STI today was very dramatic. It gapped down 41 points to 1833, hit an intra-day low of 1814 points before closing at 1887. Today's candle pattern looks like the formation of a bullish piercing pattern. This is a potential bullish reversal signal during a downtrend (the market was in a downtrend over the past 3 days), then it gapped down. This movement looks like the continuation of the downtrend, but then the bulls pushed the price up past the mid point of the previous day's candle. So, it looks like the green candle 'pierced' the red candle from below. From here, it looks like there will be another test of the resistance at 1959. If the STI manages to break through the 1959 level, the upside target will be 2461. This target is calculated in the same way as i calculated the target for Capitaland. You can see that the STI made a double bottom during the past 6mths (the bottom level was at 1457), with the pivot at 1959). The depth from the pivot to the bottom is 502 points. The upside target if the STI breaks out of 1959 = 1959 + 502 = 2461.

STI - rising window

The STI is fast approaching the key resistance level of 1960. Its ascend was much faster than i had expected. I have been commenting on the weekly chart of the STI as the trend is easier to follow on the weekly chart. However, today, i thought i'd comment on the daily chart as the action during the past week was quite interesting. The STI began the week with a strong gap up, or as the Japanese call it, a rising window. On the next day, the gap was partially filled, but not completely. So the zone between 1836 and 1848 is now a support zone. Notice an almost identical support zone on the first week of Jan09. During that time, the STI gapped up, and over the next two days, formed a bearish 'dark cloud cover' candle pattern, and on the fourth day, closed below the support zone. Once that happened, the STI went into a free fall. This time around, on Thursday, the bears tried to push the STI down and almost formed a bearish dark cloud cover. But the bulls managed to push the STI higher so that the penetration of the red candle was not sufficiently deep enough to form a dark cloud cover. (A dark cloud cover is formed when the red candle closes below 50% of the previous day's green candle). On Friday, the bears were slightly weaker (or the bulls stronger), so that the STI formed a higher low compared to Thursday's session. This showed that the underlying strength of the STI is still positive even though the upward momentum is a little weaker. My view is that the STI will continue on its uptrend unless there is a close below 1836.

Capitaland - Double bottom

i was looking at the chart of Capitaland and wondering what to name the title of this post. I knew that the price was going to break through $3.00 (OK, not knew, but chances are high that it would break through that price soon). I don't really want to call it 'breakout' again as that would be a bit boring. And suddenly I saw it! A double bottom on the weekly chart. And with this realisation, i can now project a price target for Capitaland once it breaks out of the $3.00 level. The projection is computed by measuring the price difference between the pivot (the $3.00 level hit in early 2009) and the line joining the bottoms (which is slightly less than $1.90 since the second bottom is at $1.70, but never mind. i'll use $1.90 to be a bit conservative), giving $1.10 and then adding this to $3.00, resulting in a price target of $4.10. And what a coincidence! $4.10 is remarkably close to a major resistance level of $4.13. My suggestion for an entry into Capitaland would be similar to my suggestion for COSCOCORP: buy upon price breaking through $3.00 on high volume.

COSCO - An update

I am not sure what to say about COSCOCORP. Its performance over the past month has been nothing short of breathtaking. Most of the time, i could only watch with disbelieve as i witnessed an unending stream of buyers snapping up whatever shares the sellers were offering. It has broken through key resistance levels of $0.775 and $0.905 and is now soaring towards the next resistance of $1.16 at higher volumes.



Above is a daily chart of COSCOCORP at a much wider time scale just to show you where $1.35 is with respect to its current price. I suggest buying COSCOCORP once it breaks $1.16 on high volume.

Capitaland - Nearing key resistance

It is only the second day of the week, and already the action is getting fast and furious. Above is a weekly chart of Capitaland. The medium trend is up as indicated by the rising MACD lines and the upturn of the Simple Moving Average line between the Bollinger Bands. The key level to take note is $3.00. Capitaland closed today @ $2.92 on quite high volume. The volume on the weekly chart is falling, but take a look at today's volume on the daily chart:





A huge bullish candle, on high volume, bouncing off support of $2.70 and reaching for $3.00. I think a good trade would be to go long once Capitaland closes above $3.00.

STI weekly - spinning top

It was a short trading week last week due to a Good Friday holiday for most markets. Above is a weekly chart of the STI. I titled this blog 'spinning top' because last week's price action resulted in the formation of a spinning top. (A spinning top is a candlestick formation with a short real body). It indicates indecision in the market. The STI has been closing higher for the previous four weeks, but last week, the bulls and the bears were about evenly matched so that the STI only closed marginally higher that the previous week. The trend is still up, but i suspect we will see some consolidation next week.

DBS - An update

I have not commented about DBS for about 2 weeks, so i thought i should write a little about it now. In my last commentary, i showed a monthly chart and mentioned that a hammer was forming, but that i was not sure as i had to wait til the end of th month to be sure. It is now a little past Mar09, and while Mar09's candlestick is not exactly a hammer as it has an upper shadow, nontheless, it is a bullish candlestick signal with its long lower shadow and a close above the middle of the previous month's candle.



Looking at the weekly chart, DBS appears to be a stuck just below the $9.20 level. Since the weekly trend is up, i would suggest buying DBS on price weakness. A breakout above $9.20 should see the price heading towards the $10.30 level.

STI - Elliot Wave

Today i watched a video in which a guy fits Elliot Waves into an S&P500 weekly chart. He managed to fit three waves and mentioned that the S&P500 is currently on the fourth upwave and that the fifth wave down will take the S&P500 to the 500-point level. (It is currently at 842). For this view to be invalidated, the S&P500 needs to trade above 930 (or around there). I wonder if this is the case for the STI. I pulled up the STI weekly chart and drew in what i think are the major up and down waves. (The lines are in thick yellow). Voila! I managed to draw five waves!; three major down waves and two minor counter trend waves. (If i read Elliot Waves correctly, the theory says that a major trend consists of five waves; three in the direction of the major trend and two counter trend waves. Thereafter, a reversal?) According to what i managed to draw, the STI completed its five waves down and is time for it to rally. Really?

Maybe some people will draw the waves differently and conclude that we are only at wave four. i suppose they are, or maybe were, busy shorting the market at every rally, hoping to be early in catching the major fifth wave down, but finding themselves caught at the wrong side of the trade and having to close their short positions. I believe this is one of the reasons that this 'rally' that we are seeing since early March is so strong. People who went short discover to their horror that the market is racing ahead and so they close their short position by going long. People at the side watching the market roaring ahead cannot stand waiting at the sidelines anymore, and so they too jump in and go long, thus adding more fuel to the 'rally'.

Be wary of people hyping up the current market conditions by saying that this is a bear market rally, or that we are only at the forth leg of Elliot wave and that a major fifth wave down is coming, or that we are now in an 'overbought' situation and that a correction is imminent. Look at the chart objectively and as far as possible, go with the trend. Of course you may trade counter trend, but you need to be much more nimble in getting out when the trade goes agains you.

Daily STI - revised

Grr...This morning's STI chart really confused me. Down day on high volume means that the trend is very likely to continue. So i was very puzzled by the little rally we are seeing across Asian markets now. I had another look at the STI daily charts and i was a little comforted that the huge volume i saw this morning was some data error.

Yesterday's down day was on light volume. Unpleasant for those caught on the wrong side of the market, but it means that people are taking profit; not selling down. From what i can see at mid-day, there seems to be good support at 1676. No doubt the STI closed below that yesterday, but it bounced off that level today and appears to be holding well. MACD and stochastics are both declining, so what to make of them? Well, the STI, based on the weekly chart is still on an uptrend, but looks like is taking a breather.

Daily STI chart

Since i put up a daily chart of STI over the weekend, i thought i should update it. I am not sure if there is a mistake in the charting software, but yesterday's volume was HUGE! Momentum is coming down and stochastics is still in the overbought region (>80%). Looks like we are headed towards 1600.

Capitaland - The run up continues

The daily chart of Capitaland is still showing a strong uptrend after breaking through a resistance of $2.16. Last Thursday, it broke through another resistance level, $2.35, and on Friday, the price softened a bit to a low of $2.38 before settling at $2.42. I think a good trade for Capitaland would be to go long on weakness next week, with a stop slightly below $2.35 and a target price of $2.70. This price target is not obvious from the daily chart, but have a look at it weekly chart below:



Here, you can see that for six times from Oct08 to end 2008, the price of Capitaland tried but failed to break through the $2.70 mark, except the one time in the first week of Jan09 in which the price of Capitaland broke through, but only to plunge dismally and to close below the open of the previous week's open, forming a bearish engulfing pattern.

COSCO - An update

i was going through my blogs when i came across my short 'buy' note on Cosco. So i decided to look at the chart and to give an update. In my previous note, i commented that a buy signal was given when the MACD (moving average convergence divergence) lines crossed. i also noted that there was strong resistance at $0.775 and if the price was able to break out from this level, the next resistance (or target price for those going long) would be $0.905. After three failed attempts to breech $0.775, the price of COSCO retreated, formed a hammer on 20 Mar09 and finally burst through $0.775 on 23 Mar 09 on high volume. It looks like it is on the way to $0.905. What caught my eye as i was looking at the chart of COSCO is what looks like a 'dark cloud cover' on the 24 Mar 09. In this case, the peneration of the black (red) candle into the previous day's long white candle looks suspiciously like the 'dark cloud cover' formed by today's STI price action. But in this case, the peneration of the black candle is obviously less than half of the long white candle, so this should not be mistaken as a 'dark cloud cover'. The stochastics also show that COSCO is 'overbought', but i would be comfortable to hold a long position as the momentum, shown by the slope of the MACD lines and the increasing green bars of the MACD-H (histogram), is still positive.

Dark cloud cover? - STI

Let us take a look at the weekly chart of the STI. I was quite surprised by the strength of the uptrend of the STI this week. The STI started the week at 1608 and ended at 1745; a gain of 8.5%. Also this uptrend was on the back of high volume (compared with the volume of previous weeks). So the uptrend, from a middle term perspective, looks good and the STI appears headed towards 1926.


Let's have a look a the short term picture via the STI's daily chart. The outlook for the short term is not so certain. Today, the candlestick chart formed what look like a 'dark cloud cover' pattern. Such a formation occurs when the price opened higher after a long white (green here) candle but closes below the mid-point of the white candle. In this case, the mid point of the white candle is 1732. Today's index hit a low of 1729 but closed at 1745. So this is not quite a dark cloud cover if we follow its definition strictly. But i would still be a bit cautious next week. Previous support for the STI before it broke towards 1500 was around 1673. Its behavior around that level is quite important. If it is able to stay above this level, then that would give further weight to the uptrend, or at least, to consolidate for a while before pushing upwards. If not, then we may be headed towards 1570 again.

Some are saying that the STI is overbought and hence should reverse. So for this daily chart, I included a chart of its stochastics. On it are two parallel grey lines at the 20% and 80% mark (the scale on the right is in %). By definition, if the red line goes below the 20% line, it is (whatever the stochastic is measuring) oversold and if the red line goes above the 80% line, it is overbought. Overbought, as defined in Investopedia, is a situation in which the demand for a certain asset unjustifiably pushes the price of an underlying asset to levels that do not support the fundamentals. In technical analysis, this term describes a situation in which the price of a security has risen to such a degree - usually on high volume - that an oscillator has reached its upper bound. This is generally interpreted as a sign that the price of the asset is becoming overvalued and may experience a pullback. The STI certainly is in overbought territory. One trading technique is to go short when the stochastics dips below the 80% line. Another is to buy/sell when the stochastics cross each other. But it would be a mistake to go short simply when stochastics enter the overbought region. In a strong market (either rising or falling), stochastics can stay oversold or overbought for extended durations. Rule of thumb: Do not anticipate. Let the market lead.

Sorry, long story. Bottom line: The picture is mixed; for the middle term, the uptrend for the STI looks strong, while for the short term, it looks a bit uncertain. However, I do not think it would be wise to go short; a better strategy would be to go long on pullbacks.

A review of the STI

I was a bit disappointed when the DOW went down by 122 points on Friday. But, on a positive note, it was up for the week and has been up two weeks in a row - something it hasn't done for almost a year.

For the STI, what do we see? From the monthly chart, it appears that support at 1472 is pretty firm; the STI did go below that level in early March, but quickly bounced off. So at this point, it looks unlikely that we will head towards the 1200 level reached in 2003 unless the STI manages to close below 1472 on a monthly chart.

Let's have a look at the weekly chart:



STI's movement has been sideways and largely range bound between resistance of 1926 and support of 1472. Looking at the momentum of the STI, it does look likely that the STI will trade towards 1700 within the next 2-4 weeks. If it fails to close above 1700, it is likely to turn down and retest the 1570 level again. If it does manage to close above 1700, the next hurdle would be 1926. A close above 1926 would be very significant and i believe would signal the end of the bear market.

COSCO - ready to go?

Here is a daily chart of COSCO. A buy signal was triggered when the MACDs cut on the 13 Mar09. However, the price failed to break through resistance of $0.775. If it does, the target price is $0.905. Stop should be placed around $0.70.

Bullish divergence - Capitaland

I was very excited when i saw the bullish divergence chart pattern on the daily chart of Capitaland. Bullish divergence occurs when the price traces a lower low, ie $1.94 on 10 Feb and $1.70 on 3rd Mar 09, but the MACD traces a higher low instead. (See the trend lines in green. My trend line on the price is off. Sorry.). This shows that the bears are losing steam. A buy signal was given when the MACD lines crossed around 11 Mar09, around $1.99, target around $2.35, stop around $1.91.