Losing key level a critical development for Straits Times Index
Straits Times Index lost key psychological level at 3300 as well as major 76.4% Fib-R in a big way today. This bearish picture for the Singapore stock index has long been unfolding. There is plenty of room to fall.
Straits Times Index on dangerous ground
In an earlier analysis on the Straits Times Index, I described the STI as falling out of a wedge and in danger of correcting soon. This is the chart I posted in conjunction but you can read my analysis here.
It has fallen deeply today and confirmed my fear. In fact, I can describe the STI price action in 4 steps:
- Falls out of upward rising wedge with bearish implications
- Price pulls back to previous support turned resistance; establishes a new trend line (red dotted)
- Price action confirms new trend line as resistance
- Price fails steeply and loses key psychological level at 3300
Losing 3300 is critical on big picture time frame
Losing this psychological level is critical on the big time frame. There is a confluence with 3327.80. This is a Fib-R level that we have highlighted before. Their significance comes from the big picture which big boys are watching as well as being levels that have been tested, verified over a number of occasions – a rejection at this resistance is going to send the index into correction mode to find support.
Stock investors have been rescued so many times by central bank stimulus that its is so easy to fall asleep on a trade. Yet the index could still pull back to test 3300 so that there is room for more confirmation, or procrastination.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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