Clear trend and resistance for STI
The 200-day exponential moving average which is the blue line in this daily chart, is showing clearly the roadmap and resistance for the STI.
In this 2-moving average setup, the 200-day ema shows long term trend while the red 50-day ema indicates short term. That the 50-day ema is now below following a death cross, overall trend is down. Until price is clearly above the 200-day or a golden cross emerges, there is little reason to go long. In fact, there is every reason to consider the possibility that the Straits Times Index will go down further, dragged by the overall market. If you have the means, going short is one way to trade this market. The other way is to play short term rallies.
2-moving average setup of the STI: downtrend
When is a good time to buy?
Don’t jump to buy just because your gut tells you that stocks are cheaper. This break down in the Singapore stock market has taken some time to develop (see stories below) so a recovery will not happen very quickly. Look for golden cross between these two averages or look for big bullish reversal chart patterns. If you wait patiently, a generational opportunity to buy stocks at very good value may appear.
Blow-by-blow breakdown in STI
- STI technical analysis: Singapore Straits Times Index bear market yet? – 15 June 2013
- Straits Times Index increasingly bearish; approaching ema death cross – 21 August 2013
- More bearish signs for Straits Times Index; shifts to lower trend line – 06 December 2013
Dow Industrials’ 200-day ema roadmap
200-day ema as support
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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
Soh Tiong Hum is a member and regular speaker at Technical Analysts Society Singapore events and has a bi-monthly lunch time event at IG Singapore on forex and stock markets. He is an avid blogger on technical analysis topics; his Twitter account @sohtionghum
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