Straits Times Index
The probable Head and Shoulders pattern I suspected was forming is invalidated. However, STI has reached the resistance of the last significant high ( double top ? ). If it is able to overcome this resistance, we will be looking at the upper end of the broadening formation confluence by the white color resistance line ( around 3,280 ). Failing which, we will see the index diving toward the lower boarder of the broadening formation.
On the Point and Figure chart, STI has just broken above another column of X giving a fresh bullish buy signal. However, the current column of uninterrupted X looks set to turn into a high pole which has bearish implication.
To conclude, if STI is able to break above the resistance of the last significant high, we will be looking at 3,280. Conversely, if STI reverse from here. We will need to watch the extend of the pull back. Once 2,920 ( 50% of the high pole ) is taken, chances is that the high pole formation is getting real. When that happen, STI may run the risk of heading toward the lower boarder of the broadening formation.
I made a request to Collin Twiggs at IncredibleChart to include STI in his analysis. Today, for the first time, Collin has included STI in his blog. However, he told me he may not be able to do that on a weekly basis, probably on ad hoc basis. His analysis can be found from here
Labels: Market Direction
posted by Market Wizards @ August 03, 2010
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