Market Diary:
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Wednesday, November 24, 2010

Straits Times Index Update

The sharp plunge by 64 points in the local bourse yesterday has a profound impact on the technical landscape!

The Straits Times Index broke trendline A yesterday but found support at around 3,120 ( thin blue support line ). When a trendline is broken, prices will usually move a distance beyond the trendline equal to the vertical distance that prices achieved on the other side of the line prior to the trend reversal. This is why I stated the price objective will be trendline B and not 3,120 ( which I believe is a temporary support ).

Daily Chart:

There are more evidence to support the notion that prices will dip further after some technical rebounds ( probably to touch trendline A ). The weekly chart has exhibited many bearish signs:
1. Bearish divergence between RSI and the underlying price action;
2. A shooting star candlestick surfaced three weeks ago;
3. Parabolic SAR sell phase has been triggered

Weekly Chart:

In the monthly chart, a shooting star is in the making ( there is serious implication on this ) !

Monthly Chart: