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Tuesday, August 17, 2010

Straits Times Index - Candlestick Chart Analysis

STI hits 3,043 on Aug 3 and reversed from there forming a double top chart pattern between April 15 ~ August 3.

In the upcoming weeks, we need to watch the extend of the retracement. A break below the thick blue trendline ( confluence by the 200 SMA ) at around 2,820 suggest further downside to the bottom of the broadening formation ( around 2,600 ).

Conversely, if the index is able to bounce back up and surpass 3,043. Sentiment will turn bullish and will be looking at a target of 3,280.

At the moment, it may be wise to stay at the sidelines to see how the market resolves itself. New long can be added when the index survived the test of the thick blue trendline!