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Rebound Imminent, Cautious Remained
STI loss 218 points in 7 consecutive sessions after failing to break 2,900 twice. DI- is over extended while RSI is oversold. Rebound is imminent at the backdrop of Dow gaining 125 points on the last trading day of the week.
Resistance : 2,775, 2,815, 2,857, 2,900
Ever since STI traded above the 200 SMA on May 5, 2009. It has never touched the 200 SMA again. Last Thursday, the index has penetrated the 200 SMA as well as breaking an uptrend line. These are signs with bearish implication. At the same time, the weekly chart of STI is showing clear sign of bearish divergence & failure swing. This leads me to think that any rebound is likely to complete Elliot Wave 4 as shown below. The journey ahead remains bumpy and bearish bias. Target at 2,420 remained.
Labels: Market Direction
STI - 200 SMA Broken
The Straits Times Index broke the 200 SMA and the gold color trendline today. Something I have hoped it will not happen.
The target for trendline violation is 2,420.
Some observations to note:
1. ADX has risen from 13 to 26 indicating the downtrend is gaining strength;
2. MetaStock system chart shows the index has entered a bearish phase beginning May 18;.
3. Eilllot Wave count for the current correction ( since April 15 ) to have 5 waves. Correction should always be 3 waves ( A, B, C ). The only reason we see 5 waves is that the entire 5 waves belong to corrective wave A. If I am correct, we will see the index bounce back at the end of Wave A to form Wave B. But after Wave B is completed, it will still have one more leg down to hit 2,420.
I will try to exit the old long on the next bounce ( Wave B ).
Labels: Market Direction
Replica Pattern !
Straits Times Index
Based on STI alone, it is very difficult to determine when is the market bottom because STI does not call for the shot but Dow does !
With that in mind, the price action on May 14 & 17 resemble May 5 & 6 ( circled ). If history does repeat itself, we may see a technical rebound. If that happen, 2,812 may mark as "Higher Low". Then all we need is a "Higher High" ( >2,900 ) to be out of the wood.
Conversely, if prices edge lower and revisit 2,812, 2,775 and then break the gold color trendline ( and 200 SMA )… then we will be looking at 2,500.
So next few days will be quite crucial.
SC Global
If it is able to break $1.70 successfully, next targets will be $1.80 & $1.90
Labels: Market Direction, Stock Pick
Genting SP & Longcheer Update
Genting SPGenting SP managed to breakout from the downtrend line and resistance at $0.98. It hits the 200 SMA today at $1.03 and closed 2 cents below it. There may be profit taking after the strong showing today. $0.98 will now become resistance turned support. The good news is the weekly chart is now on Parabolic SAR buy phase ( bullish implication ). Again, do expect very heavy resistance between $1.03 ~ $1.05. Once cleared, we can expect further upside.
Longcheer Update
After breaking out from the Cup & Handle chart pattern per my previous post dated March 24, Longcheer rallied from $0.65 to $0.78 before a 'throwback' occurs and retraced back to $0.62. It seems like some action may be coming again now !
Many counters are looking set to have more actions over the next few days! NOL, SembCorp, Noble...etc. just to name a few !
Labels: Stock Pick
Market Rebounded
The market has finally rebounded, two days later than I have expected.
1st resistance : 2,900 ~ 2,906 (Fibo 50%)
2nd resistance : 2,937 ( Fibo 61.8% ) ~ 2,940
3rd resistance : 2,984 ( last significant high )
Key support : 2.820
If the index u-turn in between 2,940 ~ 2,984, we need to worry on whether a head & shoulder chart pattern is in the making ( although the volume so far does not advocate this ).
IndoAgri An important uptrend line was breached following a double top chart pattern formation. Potential downside target is $1.90.
Genting :Three obstacles to conquer before propelling further:
1. The downtrend line ( diagonal line )
2. Resistance at $0.98
3. 200 SMA confluence by support turned resistance at $1.05
Once 200 SMA is overcome, the counter will turn bullish.
Labels: Market Direction, Stock Pick
Error Trade Caused Dow To Crumble
Dow plunged nearly 1000 points at one point yesterday before paring losses ( -347 ) as a suspected trading error in P&G caused trading computers to undergo a technical sell. Apparently, a trader entered a "b" for billion instead of an "m" for million in a trade. Computer trades account for a huge majority of liquidity in the US and the selldown was partly caused by the computers.
Yes, I am surprise and this is almost like the act of god, totally uncalled for !! The panic selling in STI during early trade is also uncalled for !
Labels: Market Direction
Bullish Reversal On The Card !
The price action today was exactly what I have hoped for. The intra-day low touches the gold color trendline and Fibo 61.8% ( 2,813 - closed enough to 2,810 ). Well, the large hammer candlestick is textbook perfect of a bullish reversal. I will be very surprise if it turns out to be otherwise !
Labels: Market Direction
Silver Lining
Straits Times Index
I see light at the end of the tunnel !
My basis :
1. The closing today is an inverted hammer at bullish star position supported by 50% Fibonacci retracement between Feb 8 low to April 15 high. The inverted hammer is not generally the strongest of reversal patterns. However, it can be a good warning of an impending reversal because it is a candle that illustrates the bulls aren't completely dead and buried;
2. DI- is showing sign of over-extended while Stochastic is severely oversold;
3. The minimum target for violating the trendline ( 2,870 ) was met
That said, I do not have the power to dictate how the market should move. These are just some points observed that the bullish reversal may not be too far away if it is not already here yet. My worst case scenario is the gold color trendline in the chart confluence with Fibo 61.8%, which is 2,810 or another 50 points away.
Once the reversal has arrived, we will need to worry next is the index trying to form a 'head & shoulder' pattern !!
IndoAgriDuring intra-day, prices have violated the uptrend line but fortunately closed above it with a rickshaw man candle at bullish star position. This trendline is pretty significant considering the number of touches it has established since March 2009. Confirmation is needed tomorrow to see if the bullish star ( 2 candles pattern ) will turn into morning star ( 3 candles pattern ), which will suggest a bullish reversal. On the other hand, if the trendline is breached on a closing basis, this will have a bearish implication.
SembCorpAs shown in the chart, the closing today was supported by the uptrend line. Buying at support is always good PROVIDED if the support hold.
Dow Jones Industrial AverageInteresting enough, I did not make any changes to the chart at all since it was first drawn a few weeks ago. Once trendline, support & resistance, moving averages are properly defined. The same chart could be used to predict major support / resistance ( which I have not changed it for week - 10,770 )
Labels: Market Direction, Stock Pick
