SG SESSION (Established a Lower Swing Higher, Trading Towards 2,800 Critical Support Zone)
The Straits Times Index (STI) ended the week with a loss of -0.8% (-23.38 points).
During the week, STI established a lower swing high (lower high) which is the first sign of a potential short term downtrend channel establishment (of the three factors to determine a trend reversal). The second sign is the violation of the highlighted lower bound uptrend channel which has been broken (though with low transacted volume which implies much lesser significance in this price action).
At the current junction, the 2,800 support level, established from prior swing low, will be a critical price level for the confirmation of this short term downtrend channel. Do note that this support zone also coincide with STI’s 200D Moving Average support, along with 20D MA Envelope (2 standard deviation) lower boundary line.
SG SESSION (Rebounded off Bullish Reversal Confirmation)
The Straits Times Index (STI) rebounded during the week, closing with a gain of +1.4% (+39.23 points). The bullish reversal was alerted during last week’s technical outlook. You may refer to the posting over here.
At the current junction, STI is poised to retest its resistance at 2,900 level. The breakout of this level will affirm the strength of its existing rally towards next resistance at 2,965 level.
The levels to watch for further downside is the break of the Doji Star candle low at 2,803 level.
SG SESSION (Sitting at 200Days SMA with a Bullish Reversal Signal)
Some observation of the current development in STI:
STI is currently sitting on top of its 200 Days Moving Average (200SMA),
It is also sitting on its 20 Days MA Lower Envelope Boundary, which STI has a tendency to bounce higher off it over the past 3 months.
Wednesday (3rd August) was a Bullish Reversal Candlestick Pattern (Doji Star), and it’s currently been supported to establish a swing low
The imminent establishment of support by Wednesday’s Doji Star candlestick pattern will affirm the mid-term bullish trend channel as highlighted in the chart above.
G SESSION (Bearish Wedge Formation Played Out)
The Straits Times Index (STI) broke down its Bearish Wedge Formation, closing the week with a -2.6% (-76.66 points) during the week. The Bearish Wedge Formation and signs of imminent correction in STI was highlighted during last week’s technical outlook. You may refer to the posting over here.
The bearish play in STI was specially significant on friday’s closing (29th July), with the market gapping down and closing near the low with high transacted volume. This implies a meaningful effort and pressure in keeping the component stocks at their day low even with the accumulation of buying interest stepping in.
SG SESSION (Bearish Wedge Formation In Play, Signs of Imminent Correction Ahead)
The Straits Times Index (STI) continue its rally of +0.7% (+20 points) during the week, trading towards its 2016 year high of 2,965 level.
However, STI is currently displaying a Bearish Wedge Chart Pattern, accompanied with several bearish signals awaiting for breakdown of price. Bearish Divergence is observed in Force Index along with MACD Histogram as the absolute prices trends higher towards its upper band 20MA envelope and immediate horizontal resistance level, signifying a greater likelihood of correction ahead.
SG SESSION (Bearish Wedge Formation In Play)
The Straits Times Index (STI) staged a strong rally of +2.8% (+78.31 points) during the week, breaking out of the range of 2,880 resistance and 2,830 window support zone as highlighted last week.
However, STI is currently displaying a Bearish Wedge Chart Pattern awaiting for breakdown of price.
The levels to watch for the week are 2,905 resistance turned support level, along with this year’s all time high level at 2,965 (immediate resistance).