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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.

Straits Times Index falls out of wedge with bearish implications

Straits Times Index falls out of wedge with bearish implications

 

It has fallen deeply today and confirmed my fear. In fact, I can describe the STI price action in 4 steps:

  1. Falls out of upward rising wedge with bearish implications
  2. Price pulls back to previous support turned resistance; establishes a new trend line (red dotted)
  3. Price action confirms new trend line as resistance
  4. Price fails steeply and loses key psychological level at 3300
STI loses psychological 3300 level

Index breaks down further, loses key psychological level

 

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.

Straits TImes Index fails at resistance on weekly chart

Huge implications from this price action at very significant resistance

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.

Plan accordingly.

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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One thought on “Losing key level a critical development for Straits Times Index”

  1. Soh Tiong Hum says:

    I realise in my rush to do these charts before the end of the day, the second chart shows Heikin candles overlapping normal candlesticks. I have decided not to change it however because the big resistance zone is the star in this story, not candles.

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