Caution reigns

i have not commented on the STI or the market for quite a few days because the market is not doing anything interesting. After 8 days of listless sideways motion, the STI gapped down and closed down about 20 points today. The longer term trends are still up, but the momentum is not looking so good. The MACD has been making a series of lower highs while the STI retested the previous high of 3088 and failed to penetrate that level. We could be looking at a retracement to about 3020, which is where the medium term moving average is, or even a test of 2980, which is the previous pivot low. Do be cautious, because the economic situation in EUROPE, and China is still looking rather bleak.

STI still range bound, but showing signs of strength

Above is a daily chart of the STI. Support appears to be established at 2975 three days ago and we are moving towards resistance at 3030. A break above that will mean a retest of the year's high of 3088. Trends are shifting to the upside.

Genting gained massively today on high volume and looks poised to break above the previous high of 1.395. A break above that will most likely lead to a test of 1.45. Support is at 1.33.

is the STI rolling over?

Price action of the STI is not good. It has been slowly rolling over since early August. Today it broke recent low of 3004 and looks headed towards the previous pivot low of 2974. The medium term moving average provided some support today, but i dont think that will hold as the mood is decidedly bearish today. If 2974 does not hold, the next support level is 2940. The short term direction is down, but the current downturn seen from a longer term perspective appears to be a healthy correction back to the 61.8% fibonacci retracement level. My view is that the longer term stock market trend is up.

The pattern of tipping over is also seen in most stocks. Here we have a chart of Noble Group falling to its previous pivot high of 1.165 before closing one bid higher at 1.170. There is some support here from the longer term moving average. Next support is at 1.15. Resistance is about 1.20 (medium term moving average)