2832.64 an ominous close for Straits Times Index

Straits Times Index was supported 4 times by 2840, a technical level that has some historical precedence. Based on closing today, not any more. Is this a real break or a false one?

 

2840 support false break or real?

I wrote that 2840 is a potential technical support level for the Straits Times Index based on it’s history.

This level is a 20% retracement or discount off the top of STI at 3550.94. To be exact, the support is 2840.75. Based on observation, we received subsequent confirmation from price action that the market was indeed looking at this level as well.

In fact based on price action up till yesterday 24 September, 2840 proved to be a support 4 times.

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STI daily chart

Today, not anymore.

With the market, we are dealing with people and not machines (except HFT algos). So the market has a habit of breaking levels falsely as well which we have documented many times too – like this one which appeared just before China A50 collapsed. So I am not really sure whether today’s closing level (and for Week 39 as well) is a real break or a false one. True or false, I guess we will know next week. However the trend in charge at the moment is a bearish one so until proven otherwise, I wish stock market bulls and bears a happy weekend.

 

Update 28 September 2015

This level is a 20% retracement or discount off the top of STI at 3550.94. To be exact, the support is 2840.75. Based on observation, we received subsequent confirmation from price action that the market was indeed looking at this level as well.

Correction: Precise top for STI is 3549.85 and the 80% mark is 2839.88. Please see corrected chart below.

STI 80% market (support) at 2839.88

STI 80% market (support) at 2839.88

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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 was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX. Come find Tiong Hum on Google+
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