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.