Follow-up on 2 SGX-listed property stocks that were discussed late April. Over 2 months, their technical picture did not improve. In fact bearish aspects of their setups were reinforced.
SG stocks Capitaland, CityDevelopment
Recall that late April, I wrote that Capitaland C31 and CityDevelopment C09 looked like they are terminating their long term trends. This is an update on their status. Backstory here and here. For Capitaland, the picture is generally unchanged although bearish month candles for May and June with moving averages on top is really reinforcing the bearish setup.
Singapore stock Capitaland C31 exiting 7-year pattern on downside
The big triangle in chart is not entirely symmetrical but if we put aside petty distinctions, LuckScout.com has a really good explanation that I agree with.
Bearish Symmetrical Triangle forms at the end of a downtrend. Like the bullish symmetrical triangle, bearish symmetrical triangle is usually the downtrend continuation, and will break down eventually. However, it is not a good idea to trade based on these rules, simply because the market moves on its own way and it doesn’t necessarily follow these rules. You can not go long just because you see a symmetrical triangle formed on a bullish market. You can not go short just because you see a symmetrical triangle formed on a bearish market. Wise, experienced and disciplined traders have a safer way to trade these kinds of chart patterns.
As for CityDevelopment, it is increasingly clear that price action over last 3 months was a pullback to former support. If price fails to break that former support turned resistance, bulls will get disheartened making way for bears to get a turn at the downside.
Singapore stock CityDevelopment C09 former support becomes resistance
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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
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