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.