We were early pointing out how constituents stocks in the Straits Times Index were looking increasingly bearish early in July and we know how August and September turned out.
In fact our opinion of the local stock market at this moment can only be described with one word: pullback. And the charts of these two sub-indices are most representative of the broad market: long term support or trend line broken – new low – pullback to test previous support turn resistance. Retail investors should note that when new 52-week lows appear, market sentiment is much looking for further South.
FST Telecom sub-index weekly chart mid-2008 to present
The four key features:
A. 6-year long trend line showing previous uptrend.
B. Trend line broken, price action shows line as resistance now.
C. 2014 low as support.
D. 2013-14 high to be resistance.
Losing that 6-year trend doesn’t mean telecos are going South but it also means that long term investors may have to revise expectations. Features C and D are important indicators from now on.
FST Consumer Services
FST Consumer Services sub-index weekly chart mid-2008 to present
Consumer Services is in worse state that Telecom. Flat for 6 years, new 52-week low printed. That old support will be resistance, bears will be looking for more.
The following two tabs change content below.
Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
Soh's Twitter account @sohtionghum
was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015
"I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."