FTSE, SATS, XLP and USDJPY charts
FTSE looking for resistance
— Soh tiong hum (@Sohtionghum) September 21, 2017
I wrote last week that FTSE left behind 12 weeks of horizontal support or 5 weeks of consolidation. This is what price action looks like today.
The fact that highest price over the previous two candles fit exactly to the horizontal line spotted in this chart means that market is looking at the same level. However, each trader has to decide whether there is sufficient confirmation or signal from price that this is the right level or time to trigger a trade. Price could pop higher to test resistance again or to go to an even higher level, or it could simply just continue to track sideways until there is a reason to resume falling.
SATS S68 multiple bearish signals meets downgrade
On 14 Sep, I spotted several signals from SGX-listed S58 SATS. My observation was bearish and this was what I wrote
SATS prints bearish elements with head and shoulders reversal pattern, staying red after nearly 3 quarters and printing a new low for the year in August.
Not coincidentally, The Edge Singapore published yesterday that CIMB Research is downgrading SATS to ‘reduce’ from ‘hold’ and a target price of $4.24 instead of a previous ‘$5.11’. So this is a confluence between chart observation and fundamental analysis.
Early shorts had a good run since late-Q2 or beginning of this quarter. Latecomers who want to jump now has to decide whether the rebound 12-month low today is an indication that some from of support has been reached. There is always risk for opinion leaders and early moves but more unfortunately for latecomers – now that a major newspaper has reported – there are probably only leftovers.
XLP head and shoulders’ neckline broken but what’s next?
I published a post on XLP on 21 September. Frankly I don’t have a very strong conviction for this particular chart. Not because of the setup, XLP actually shows in my opinion, a high probability setup. But because this stock market is becoming a bit ‘perverted’, in the buy-every-dip sort of way.
I have seen this story before. The Internet Bubble looked like this. The problem with this kind of runaway rally is there is just no way to time it. Whoever called it bearish too early should have plenty of egg on face by now – this is exactly how I feel.
Back to my original post I painted a head and shoulders chart pattern. The neckline of that pattern is now broken which means that purely from a chart pattern point of view, a sell signal has appeared. Bearish readers should decide whether that signal is valid or not because when you try to play reversal or counter trend, there are just too many support/resistance levels to overcome. Note this trend line. Is this the level buy-the-dip investors will come in again?