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)

STI - support held.

i was quite surprised to see that STI closed pretty strongly today. It did not break yesterday's low, and did not close above yesterday's high either. So based on the daily chart, today's price action was pretty strong. The boundaries now are 3005 and 3032. If the STI opens above and closes above 3032, then the uptrend resumes and we should see another test of 3088. If the STI opens below 3005 and closes below that, then we are likely to head first towards 2974 and if that fails to hold, then down to 2940.

STI - support broken

Support at 3036 was broken this morning when the STI gapped down and it continued to sell off very rapidly during the first hour of trading. After that, it simply drifted sideways. The short term technical picture of the STI is rather bearish. Key levels to note are: 3000 points (psychological support), and around 2974 (previous pivot low). For those of you who are long and buying on pullbacks, do be careful because the market could pull back to about 2940 level if the market does not like what the FED chairman says.

STI - not looking so good

STI is not looking so good. Volatility is down, momentum is down, short term trend is down. Key support level is 3036. Once that fails to hold, we are looking at a correction to 2985. Right now, investors are waiting to see what ECB and the Fed are going to do next. I am afraid that if nothing substantial comes out, we are in for a major sell off.

tipping over? or buying opportunity?

Stock market was a bit more exciting today. The market gapped lower and proceeded to sell off hard. But after one hour of hard selling, buyers came back and pushed the index back to where it opened in the morning. Bargain hunters? Or do they know something we don't. As i write now, Europe is still down. Strong support is at 3041 and resistance is at 3088. But if this support fails, the next strong support will be at about 2990. There is a bearish divergence between the MACD and the index charts, so do trade cautiously.

Golden agri staged a remarkable rebound in the afternoon to close at the day's high at 0.72. The stock has been trading in a downward channel since mid July, but support at the moving averages is rather strong. Momentum is slightly up now. Support is at 0.700 and resistance is at 0.745.

Noble Group's price action is rather bullish now, having broken through all three moving averages. It's retracement over the past 3 days is healthy is looks like a good opportunity to take a long position. A long entry between 1.21 and 1.24 would be ideal, with the initial profit target of 1.29. A stop could be placed at 1.19 since 1.21 is a support level.

Gentng is also doing a bit of a retracement, but the stock is still a bit stuck, with resistance at the middle moving average. Price action is a little bullish and a good long position is at 1.305, with an initial price target of 1.38. Initial stop should be placed at 1.23.