Market Wizards

STI has corrected by 38.2% from the peak & trough of Aug 4 ~ July 8. The uptrend & downtrend lines are converging. The week ahead should see STI try to sort out a clear direction. A break below the last significant low of 2,520 ( which will break the uptrend line too ) signal a bearish move. Next support will be 2,424 ( then gradually 2,250 ). A break above 2,630 ~ 2,650 ( which is the last significant high ) signal the three weeks correction may possibly be over.



Personally, I feel 38.2% is too shallow for a correction at the end of 5 waves. However, the market has not been given late comers too much chance to find good entry since the rally began on March 10. So it is hard to say, this may be it ! Furthermore, Dow has turned bullish with the strong gain of 155 points on Friday. If the rally is sustainable, regional bourses will take cue and should rally out of the dark cloud built up the last three weeks!

While reviewing the 30 STI component stocks to find out whether they are currently above ,below or touching the long term uptrend lines. I obtained the following summary ( A = above, B = Below, T= Touching ) :
Capitaland ( B )
CapitaMall ( A ) - look up for $1.57
CityDev ( A )
Cosco ( B )
DBS ( B )
F&N ( B )
Genting ( A ) - look up for potential breakout at .92 ~ .925 at high volume
GoldenAgri ( T )
HK Land ( T )
Jardine C&C ( A )
JSH ( B )
JMH ( B )
KepCorp ( A )
Kepland ( A )
NOL ( T )
Noble ( A ) - triangle pattern forming, look up for pot breakout at $2.10 at high vol
Olam ( T )
OCBC ( A )
SemCorp ( A )
SembMar ( A )
SIA ( A )
SIA Eng ( B )
SGX ( A ) - there seem to be a wedge formation, look up for $8.6
SPH ( A )
ST Eng ( T )
SingTel ( B )
Starhub ( pretty trendless, can't classify )
UOB ( T )
Wilmar ( T )
Yanlord ( B )

The results : 9 has broken the trendline, 13 above & 8 touching.

PS: Technical Analysis is time sensitive. Some of the numbers referenced before such as 2,480 was good through the last few days but have little meaning as we move forward. This is because the trendlines & moving averages are either ascending or descending. Take next week for example, if we break below 2,520 which is the last significant low, the uptrend line will be broken. So 2,480 has little meaning to be mentioned again.