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Straits Times Index coming to next key resistance level at 2950 level.

RSS - Mon, 07/18/2016 - 05:25
Straits Times Index coming to next key resistance level at 2950 level.

Straits Times Index turned out to be a pretty exciting last week. The week started with a break out action which broke the tough resistance at 2860 level. Breaking out of this resistance level indicates that STI is attempting to form an uptrend momentum. It succeeded in maintaining the break out on Tuesday by heading higher. There isn’t any bearish news that prevented the market from going higher; with exception of an abrupt trading halt on Thursday last morning. More than half of day was closed for trading as SGX’s trading system faced technical problem. However, this did not stop the market from going higher the next day. STI closed the week with 78.31pts higher and ends at 2925.35 level.

Stream of positive news are heard over the week. In the upcoming week, more companies are releasing their earnings report. Will it affect STI’s bullishness? Let us evaluate how much change had last week made to STI’s chart.

Trend: Possible sideways to skewing towards uptrend, 20 wma point upward, MacD slightly below 0 level.

Support: 2860 (50 week MA), 2800 (20 week MA), 2730

 Resistance: 2950, 3010, 3090 (100 week MA)

Observations:

Candlestick – Long white candle.

Histogram – 3G. MacD close to 0 line

RSI – At 58.2%. Above 50% line.

Stochastic – At 84.9%. Just entered overbought.

Bollinger Band –Close to upper band. Band squeezing.

Conclusion:

2860 resistance level is a strong resistance level that it refused to break for the previous 2 weeks. Confluence with the 50 week MA line made it stronger. Being able to break out from this strong resistance level indicates that the market is confident of further upside. With this, it is clear that STI is attempting to switch its momentum to the bullish side. However, the main question now is how sustainable is this break out action. Will uptrend be forming after this break out action? Hence, we have to explore through the indicators to confirm the bullish strength.

 

The mid-term indicators are now starting to show clearer bullish signs. MacD line is now near the 0 level but it requires more bullish movements before it can confirm the reversal to bullish momentum. RSI is now above the 50% and it will mean a possible change in mid-term momentum. The shorter-term indicators continued to stay bullish. This momentum will likely to continue for this week as there are not clear signs of reversal yet. However, Stochastic is now at overbought zone and the price is now near to the upper Bollinger band. This means that STI is getting more overbought but it does not imply that STI will be retracing for this week.

 

With understanding that the bullish momentum will be sustain this week, we can safely identify that STI will still be seeking for its resistance level. Immediate resistance level that STI will be facing is at 2950 level. 2950 level is the recent high that was form early this year. This high will be an important confirmation level to determine whether STI is forming an uptrend formation in the weekly chart. Failure to break this resistance level will indicate that STI might be forming a sideways trend. Sideways possibilities can be high right now as STI seems to have formed 2 of the same lows at 2730 level. Hence, it is important to look at how market will behave when it test 2950 resistance level. With overbought readings, it is possible that STI will be facing retracement action at this resistance level.

 

However, if STI managed to break this resistance level at 2950 level, it will mean that STI is forming uptrend. Uptrend formation is a positive sign for the upcoming weeks. Breaking out of this resistance level will likely to lead STI to further bullish movements. These bullish movements can lead STI to test its next resistance level at 3010 or it can even reach as high as 3090 level where 100 week MA coincides. Of course, to reach this resistance level, STI might take some time to get there.

 

In conclusion, the Straits Times Index is now gaining bullish momentum which might lead towards 2950 resistance level for this week. 2950 resistance level is another key resistance level to watch out this week. Breaking this resistance level will confirm that STI is forming a weekly uptrend formation. This formation can help STI to reach as high as 3090 level. However, as the shorter-term indicators are showing overbought signs, there are chances of retracement actions. 2950 resistance level might hold and triggers profit taking action. If this happens, there is also a possibility that STI will be forming sideways trend which can lead STI to test its support at 2730 level. Therefore, this week will be a crucial week for STI.

 

What to watch out for this week:

1)      Testing of 2950 resistance level

2)      Breaking of 2950 resistance level

3)      Testing of 2860 support level

 

 Trading strategy to adapt right now:

-        Long traders can consider cautious positions when breakout happens.

-        Shortists should only be involved when profit taking actions happens.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.           

Straits TImes Index challenging to breakout into uptrend movement.

RSS - Mon, 07/11/2016 - 10:19
Straits TImes Index challenging to breakout into uptrend movement.

Straits Times Index faced a week of cautiousness as many were searching for reasons to sustain the bullishness from the previous week. The week started with positiveness but it failed to sustain the next day. This is probably due to the public holiday in the middle of the week. With uncertainty in the market, traders are more reluctant to hold their positions over the weekends or holiday period. Trading volume fell during the week. This also shows that market participants are staying away last week. Furthermore, with US job data reporting last Friday, many traders decide to stay cautious and exited the market. This caused STI to lose its gains last Friday. These reasons supported the tight trading range of 2830 – 2870 levels last week. Only 0.67pts were gained last week; ending at 2847.04.

Last Friday night, DJI reacted bullishly after the announcement of job data. This is against the worry of drop. Will STI be able to react similarly to DJI for this week?

Trend: Possible uptrend to sideways, 20 wma starting to turn up, MacD near 0 level.

Support: 2800 (20 week MA), 2730, 2670

 Resistance: 2860 (50 week MA), 2900, 2950, 3010

Observations:

Candlestick – Doji like candle with black body.

Histogram – 3Gs. MacD close to 0 line

RSI – At 52.2%. At 50% line.

Stochastic – At 57.4%. Bullish crossover confirmed.

Bollinger Band –At mid line. Band starting to turn upwards.

Conclusion:

The price movement last week is showing clearly that STI is facing a strong 50 weekly MA resistance line. Standing at 2860 level, it had been tested for the third time during the past few weeks. This resistance level can be a good indication on whether STI will be forming an uptrend movement. However, before this uptrend movement can be conceived, there might be some consolidation actions. What happened last week can be a consolidation action. The next key question is whether this consolidation action will take a longer time or a retracement action will start from here.

 

The mid-term indicators are at indecisive levels as it is unclear of whether it should be switching its momentum to bullish one. MacD is still getting closer to the 0 level but is yet to be above it. RSI is now at 50% level but it might not have broken the RSI resistance. Hence, there might still be risk of reverting back to bearish momentum. Shorter-term indicators are showing bullish strength despite weak bullish closing last week. There are no signs of weakness currently. Hence, there is a possibility that STI will be able to start off the week bullishly.

 

A bullish start for the week will mean that STI is reacting to DJI’s bullish closing on last Friday. When this happen, STI will be trading above 2860 level. In order for STI to sustain its bullish start, it must trade above 2880 level in this week. After which, it will seek for its resistance at 2900 level. If the bullish sentiment is strong, it can even reach the next resistance level of 2950 level. When this scenario happens, it will indicate that the underlying momentum of the market had turned bullish. Hence, what come next will be a more sustainable bullish trend.

 

However, the underlying may still be bearish right now. Retracement actions still can seep into the market this week. 2860 resistance level will hold firmly and attract selling pressure. Once this happens, STI will then be seeking for its immediate support at 2800 level. Consolidation movement will then happen at this level before it can decide its next move again. This scenario will happen if the market continues to be uncertain of the future outcome.

 

In conclusion, the Straits Times Index is now trading at a key level which can determine its movements for the next few weeks. Resistance level at 2860 level is indeed strong and it can cause STI to retrace back to its past levels. However, shorter-term indicators are giving positive signs which can aid STI to break this resistance level. Once STI is able to trade beyond 2880 level, it will mean that and uptrend momentum is established. Going beyond this level can bring STI towards 2900 or even 2950 levels. If this bullish sentiment fails to conceive this week, do expect STI to retreat towards 2800 level.

 

What to watch out for this week:

1)      Testing of 2860 resistance level

2)      Breaking of 2860 resistance level

3)      Testing of 2900 resistance level

4)      Testing of 2800 support level

 Trading strategy to adapt right now:

-          Long traders can take cautious long positions if there is a breakout.

-          Shortists may need to close their short positions if downtrend fails to form.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.        

Sudden reversal in sentiment lifted Straits Times Index

RSS - Mon, 07/04/2016 - 05:47
Sudden reversal in sentiment lifted Straits Times Index

Brexit incident did not deteriorate the market like many expect it to be. Instead, it turns out to be a usual occurrence in the charts last week. Losses during the previous week were quickly being recovered last week as positive vibes returned to the market suddenly. Britain have yet to leave the EU; which came into awareness to many that it might even take years for this to happen. There were still debates in the EU currently, hence, conclusive decisions are hard to make currently. Therefore, the market could have decided to shift its focus towards other issues. US Fed have decided to delay their interest rates hike to a later date. This brought cheers to numerous in the market and brought up counters that are interest sensitive. The banks and even Reits sectors were quick in rebound. Oil prices also resumed its bullishness and hence, further lifting the oil-related counters. This sudden change of sentiment had lifted STI back at 2846.37 level. The week turned out to be one of bigger gain for this year. The Straits Times Index gained 110.98pts last week.

Many are still puzzled by the abrupt reversal of sentiment last week. This will create ponders on whether the rally will be sustainable for this week. Let us evaluate STI’s chart to anticipate this week’s direction.

Trend: Possible sideways to uptrend, 20 wma point upwards again, MacD near 0 level.

Support: 2800 (20 week MA), 2730, 2670

 Resistance: 2860 (50 week MA), 2900, 2950

Observations:

Candlestick – Long white candle. Bullish engulfing pattern.

Histogram – Reversed to 1G. MacD close to 0 line

RSI – At 49.9%. At 50% line.

Stochastic – At 39.3%. Possible bullish crossover.

Bollinger Band –At mid band. Band squeezing.

Conclusion:

Last week’s price movement had indeed made many chartist puzzled on the possible upcoming direction of STI. 2730 support level held firmly and a strong rebound is also been seen. This indicates that STI is not forming a downtrend movement despite a lower high formation. Lower high with same lows will put many to instinctively think about descending triangle formation. If you make clearer observation, the strong rebound last week seems to have prevented STI from forming another lower high. Yet, this lead to another puzzling knot on market’s direction. When in doubt, it will be the best to check with the indicators.

 

The mid-term indicators seem to be in a confusion state too. MA line reverts to its upward movement while MacD approaches the 0 level without confirming its bearish crossover. This is a positive sign that skews towards the bullish momentum but further confirmation is needed as the MacD has yet to trend above its 0 level. Shorter-term indicators reversed towards the bullish side instead of continuing its bearish momentum. Although the momentum had seemed reversed, the indicators are still considered to be on the bearish side. The indicators seemed to be inconclusive. This implies that there is a possibility of sideways formation.

 

With possibility off sideways formation, it will be important to identify the sideways range. It is clear to see that STI have formed a strong support at 2730 level during the Brexit saga. This strong support will be a strong foundation for the sideways formation. 2800 resistance level was broken easily by the market last week despite its confluence with the 20 week MA line. Hence, it cannot be a good sideways resistance level. Hence, the next resistance level at 2860 level can be a better resistance level. 2860 confluences with the 50 week line; this means that 2860 resistance level is much stronger. Furthermore, the upper shadow that STI had formed last week has clearly shown that the resistance level is strong. Therefore, STI’s sideway range is between 2730 – 2860 levels.

 

Sideways range can also help us to clearly identify the next trend that STI may adopt. Breaking resistance at 2860 level will mean that STI is forming an uptrend formation. Bullish traders should focus in the breakout of 2860 resistance level. On the other hand, 2730 level is the key support level to determine if STI will be forming its downtrend. Once this support level breaks, it will mean that STI will be forming downtrend which will lead to downside pressure in the coming weeks. As STI is trading closely to the resistance level right now, it is more likely that STI will be facing resistance this week. Possibilities of profit taking actions will appear too. However, downside might be limited by the support at 2730 level.

 

In conclusion, the Straits Times Index clearly showing a sideways trend currently. The range is from 2730 to 2860 levels. As it is now trading close to the resistance at 2860 level, it is important to watch closely whether STI will be breaking this resistance level. Breaking out of this resistance level will lead to new uptrend formation. If this resistance level holds, one should expect profit taking actions to happen which can lead STI towards 2730 level. Therefore, STI is now facing a crucial period as it will be the defacto of its upcoming trend.

 

What to watch out for this week:

1)      Testing of 2860 resistance level

2)      Breaking of 2860 resistance level

3)      Testing of 2800 support level

4)      Testing of 2730 support level

 Trading strategy to adapt right now:

-        Long traders can consider cautious positions when breakout happens.

-        Shortists should only be involved when profit taking actions happens.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.           

Brexit confirmed. Bloodshed in Straits Times Index to continue.

RSS - Mon, 06/27/2016 - 05:34
Brexit confirmed. Bloodshed in Straits Times Index to continue.

Last Friday around lunch hour, Britain confirmed its referendum to exit from the EU. It was a close fight as the result was just about 3% difference. Straits Times Index reacted strongly on Friday as the vote counting progresses during the morning. From confidence of Britain remaining EU till ending decision of leaving EU; this caused STI to swing a big range of 2715 – 2807 levels during the day. In the early week, there was confidence in the air that Britain will remain in the EU. Hence, STI was seen climbing to as high as 2815 level on Wednesday. However, it faced resistance and started to come down. Trading for the first four days of the week had been cautious. In the aftermath, nations of EU are shaken. Some hailed Britain for the bold move. France is being speculated to be called for a referendum for the exit of EU. Others were criticising for the move and scrambled to find new directions. It is known that it will be better for Britain to exit EU as quickly as possible so as to help settle the uncertainty in the markets currently.

With so much uncertainty and fear in the market, how should we expect STI to move this week? Bloodshed had happened. How much downside should we expect?

Trend: Possible sideways to downtrend, 20 wma flatten, MacD near 0 level.

Support: 2670, 2620, 2530

 Resistance: 2740, 2800 (20 week MA), 2900 (50 week MA), 2950

Observations:

Candlestick – Black candle with longer upper shadow.

Histogram – 2Rs. MacD close to 0 line

RSI – At 36.2%. Below 50% line.

Stochastic – At 34.3%. Bearish crossover confirmed.

Bollinger Band –At mid band. Band squeezing.

Conclusion:

Brexit had indeed shaken the market and caused traders to frantically exit the market. 2800 level has also proven to be a strong resistance level which turns out to be a possible lower high formation for STI. Support at 2740 level seems to be compromised after last Friday’s movement. But if catered for some whipsaw action, STI must go lower than 2713 level in order to confirm a lower low formation. Hence, it is still unclear is STI had broken down for a lower low formation. When lower low is being confirmed, it will mean that STI is forming a new downtrend formation which can lead to another few waves of downtrend actions. Therefore, for this week, we need to identify the probability of STI breaking down for a lower low formation.

 

The mid-term indicators are starting to lose its bullish momentum currently. Macd line is now getting away from the 0 line and might even perform a bearish crossover. When bearish crossover over happens, it will sign an end of bullish momentum. RSI is now confirmed to be below the 50% line which also shows signs of bearishness. Hence, the mid-term momentum might be on the bearish side currently. Shorter-term indicators are now clearly on the bearish side now. Histogram and Stochastic had confirmed its bearish signals. This means that in this week, further bearish actions will likely to continue till oversold readings are seen.

 

With bearish confirmation from the indicators, STI will likely to suffer further selling pressure early this week despite its large drop last week. The recent low at 2713 level might be threatened to be broken this week. Once this low is being broken, STI will be seeking for its next support level at 2670 level. However, as bearish momentum is usually fast and furious, support at 2670 level might not be able to hold well. Hence, STI might also be seeking for its next support level at 2620 level. These 2 support levels might be able to help STI to cushion its losses for this week at least.

 

The probability of a rebound to happen is definitely on the low side currently. If rebound happens, it will only mean that STI is attempting to trade in a sideways manner. It must first be able to recover above 2740 level before a meaningful rebound can happen. Otherwise, bearishness will still prevail. The next upside cap for STI is at 2800 level which have been proven to be a strong resistance level for the past weeks. Therefore, the odds are definitely not on the upside currently.

 

In conclusion, the Straits Times Index is now clearly facing bearish momentum. Risk of breaking into lower low formation is high right now. 2713 level will the key downside confirmation level. Once this level is broken, STI will be heading towards the next 2 support at either 2670 or 2620 levels. These 2 support levels will likely to give STI some downside cushion for this week. Chances of rebound are definitely low right now. Any rebound will be capped by 2800 level. Therefore, it is better to stay sidelines till the market stabilises.

 

What to watch out for this week:

1)      Breaking of low of 2713

2)      Testing of 2670 support level

3)      Testing of 2629 support level

4)      Testing of 2800 resistance level

 Trading strategy to adapt right now:

-        Long traders should stay sidelines.

-        Shortists can consider to take breakdown short positions.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.           

Brexit creating jitters in Straits Times Index

RSS - Mon, 06/20/2016 - 05:07
Brexit creating jitters in Straits Times Index

US Fed meeting concluded last week and they had decided to keep the current rate. This did not impact the Straits Times Index much last week as the market is more concerned on another matter. The Brexit. Britain’s referendum on its position in EU is set to be discussing on 23 June this week. Many speculated that Britain’s exit will have a great impact on the whole economic situation as the Euro zone will be shaken greatly. This jittered the market on last Monday as the market opened with a strong gap down. There were attempts to rebound during the week but it was dominated by selling pressure. A low of 2579 level was hit last Thursday before STI had a meaning rebound on Friday. With this market concern, STI was seen losing 59.55pts for the week. It ended at 2763.42 level.

With Britain’s referendum on this coming 23 June, how will STI react? Will further bearishness occur this week?

Trend: Possible uptrend to sideways, 20 wma starting to turn up, MacD near 0 level.

Support: 2740, 2670, 2620

 Resistance: 2800 ( 20 week MA), 2900 (50 week MA), 2950, 3010

Observations:

Candlestick – Black candle with longer lower shadow.

Histogram – 1R. Bearish signal. MacD close to 0 line.

RSI – At 45.1%. 50% line broken slightly.

Stochastic – At 53.9%. Possible bearish crossover.

Bollinger Band –At mid line. Flat band.

Conclusion:

STI failed to continue its bullish movement last week. Instead, it confirms its resistance at 2900 level where 50 weekly MA line coincides. Its gap down movement had also immediately broken the immediate support level at 2800 level. Breaking of this support level means that the chances of STI forming an uptrend will be lowered. Currently, it tested its next support level at 2740 level and it seems to be holding well now. However, with upcoming Brexit concern, it is hard to anticipate whether STI will be holding on to this support level. Furthermore, it can be fruitful if bearish plan can be strategized.

 

The mid-term indicators are failing to continue its bullish readings. RSI failed to hold at its 50% level and broken slightly. MacD have yet to reach its 0 level despite its attempts to test it for the past weeks. With such mid-term indications, STI is currently struggling to find its trend. Shorter-term indicators are now switching to the bearish side due to the drastic drop in value last week. This caused the histogram to turn bearish. Stochastic nearly triggered a bearish crossover. If STI is to continue to trade lower this week, bearish signals will be confirmed and STI will likely to face further bearish pressure.

 

With STI now running the risk of turning bearish, it is important to be prepared for bearish scenario. Brexit situation will definitely be the key driver for the market this week. But what are more important are the key levels that we should watch out this week. Immediate support level at 2740 level will be the key level to watch this week. It held STI firmly last week but it might break if the Brexit situation turned to the worst. Once broken, downtrend formation might be confirmed as lower high and lower low formation will be formed. The next support level that STI will be heading towards will be either 2670 or 2620 level.

 

However, Brexit situation might be just a one-time off situation. The real impact on economies is still not certain yet. Furthermore, Britain might also weight the consequences of EU exit and decides to stay put. There will be further speculations on the outcome this week. Hence, volatility will be high this week. If 2740 support level holds well this week, it will mean that STI is refusing to confirm its downtrend movement. And this will lead to a sideway formation in STI. Consolidative movement will likely to happen at 2740 level before it starts to attempt to recover its previous support at 2800 level. Going beyond that level is unlikely to happen this week.

 

In conclusion, the Straits Times Index is getting closer to bearish confirmation after last week’s bearish movement. Brexit will definitely have a great impact on this week’s movement and volatility will definitely increase this week. The key support level at 2740 is an important level to determine the trend STI will be heading towards for the next few weeks. Breaking 2740 level will mean that STI will be heading for either 2670 or 2620 support level. Otherwise, consolidative movements should happen at around 2740 level for this week. Uptrend formation is definitely unlikely to happen for now.

 

What to watch out for this week:

1)      Testing of 2740 support level

2)      Breaking of 2740 support level

3)      Testing of 2800 resistance level

4)      Testing of 2670 support level

 Trading strategy to adapt right now:

-        Long traders should look to exit some positions.

-        Shortists are to be ready for shorting signals once breakout confirms.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.           

Straits Times Index facing strong resistance.

RSS - Mon, 06/13/2016 - 06:06
Straits Times Index facing strong resistance.

Straits Times Index experienced a volatile week last week as series of uncertainties were talked about last week. Fed rate hike had been in the talk last week with many speculated that it will remain. In the meantime, oil prices were seen sustaining above $50 level and this sparks fears that it will not be sustainable. Hence, it is natural to see the market to spike upwards early last week but it failed to sustain at the end of the week. Currently, oil price concerns are dominating the volatility of the market. For the whole week, STI only gained a mere 13.74pts, ending at 2822.97 level.

Will STI be able to continue its upward movement this week? Will profit taking pressure start to happen this week?

Trend: Possible uptrend to sideways, 20 wma starting to turn up, MacD near 0 level.

Support: 2800 (20 week MA), 2740, 2670, 2620

 Resistance: 2900 (50 week MA), 2950, 3010

Observations:

Candlestick – Doji like candle with long upper shadow.

Histogram – 3Gs. MacD close to 0 line

RSI – At 48.9%. Around 50% line.

Stochastic – At 58.7%. No bearish crossover

Bollinger Band –At mid line. Flat band.

Conclusion:

Last week’s continuation of rebound had helped STI to be able to head towards its 50ma weekly resistance line. However, as it was seen by the candle formation last week, 50ma weekly resistance line seems to be holding strongly. This 50ma weekly resistance line had prevented STI from going higher during the month of April. Hence, there is a possibility that it might happen again. In order to confirm the possibilities of selling pressure after being resisted, we should look for clues in the indicators.

 

The mid-term indicators are starting to show further bullish signs. However, it is still not clear whether the momentum had been changed to bullish one. MacD line has yet to crossover to the positive region but RSI seems to be sustaining above the 50% level. Further bullishness is needed in order for the mid-term indicators to be bullish. Shorter-term indicators are clearly on the bullish side and yet to form any signs of bullishness. Hence, there might further attempts to trade higher in the early week.

 

With possibilities of bullish attempts in the early week, STI will likely to continue to attempt to reach out for its 50ma weekly resistance at around 2900 level. This resistance level will continue to be a key resistance level to determine if STI will revert its trend back to uptrend. Once this resistance level is broken, it can reach 2950 level or even reach up to 3010 level.

 

However, based on the history, 50ma weekly resistance line is a very strong resistance line. Selling pressure can also set in during early of the week as the candle formation last week shows that the bullish strength is starting to weaken. To confirm the bearishness, STI must first break its immediate support at 2800 level. This support level is currently near to the 20 weekly MA at around 2776 level. Hence, STI might attempt to test this support level if bearishness sets in. Breaking this level will mean that further selling pressure will set in and push STI towards 2740 level.

 

In conclusion, the Straits Times Index is now in a vulnerable stage. If it fails to maintain its bullish momentum this week, selling pressure might set in. The key to determine the bearishness is the immediate support level. If STI break 2776 20ma weekly support line, it will mean that the bullishness have failed to sustain. This will then eventually lead to further downside movement towards the next support at 2670 level. However, there is still hope in the bullish side. If STI is able to sustain able 2800 level early this week, STI will then be able to seek its 50ma weekly resistance line at around 2900 level. But this resistance line will likely to stay firm for this coming week.

 

What to watch out for this week:

1)      Testing of 2800 support level

2)      Breaking of 2800 support level

3)      Testing of 2900 resistance level

4)      Testing of 2740 support level

 Trading strategy to adapt right now:

-          Long traders should look to exit some positions.

-          Shortists are to be ready for shorting signals.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.

Straits Times Index establishing itself for month of June

RSS - Mon, 05/30/2016 - 05:58
Straits Times Index establishing itself for month of June

Straits Times Index continues to rebound last week as the market response in tandem with the rebound in Oil prices. Offshores and oil related counters continued to be the main contributor of the bullishness in the market. However, high volatility continues to be seen in the market as market participants start to be concern on US interest rate hike in the upcoming month of June. Stronger hints of interest rate hike in June are heard last week. Hence, many chose to stay cautious by staying out of the market. This explains the low trading volume last week. Despite these concerns, STI is still able to gain bullish strength at the end of the week; helping STI to be able to test its resistance level at 2800 level. STI gained 38.69pts during the week, closing at 2802.51 level.

Month of May is coming to an end soon while many are anticipating interest rate hikes in month of June. How should we prepare ourselves for the upcoming month?

Trend: Possible downtrend to sideways, 20 wma flattening, MacD near 0 level.

Support: 2740 (20 week MA), 2670, 2620, 2530

 Resistance: 2800, 2900, 2950

Observations:

Candlestick – White candle.

Histogram – 1G. MacD close to 0 line

RSI – At 59.2%. Slightly above 50% line.

Stochastic – At 23.1%. Oversold. Bullish Crossover.

Bollinger Band –At mid line. Flat band.

Conclusion:

The continuation of rebound last week had helped to bring some bullish confidence back into the market. However, the last of trading volume for this rebound is somewhat unconvincing to many. There is still lack of strong conviction in the market currently. Furthermore, with STI facing the resistance at 2800 level, it will likely to draw more to think into possibilities of selling pressure into the market. We cannot be sure of what is likely to happen until selling pressure starts to set into the market. Therefore, this week can be a key week to determine the direction for the month of June. Indicators should be able to give us clearer clues based on last week’s movement.

 

Despite a bullish closing last week, it did not have much impact on the mid-term indicators. Their readings remain pretty flat and were unable to give any clear directions. The risk of downtrend movement is still there but it needed further confirmations. Shorter-term indicators are much clearer after last week’s rebound. They have started to trigger bullish signal which indicates that the rebound can be sustainable. Coupled with oversold in Stochastic, there is a much higher chance for STI to continue its rebound this week.

 

Hence, with bullish readings from the shorter-term indicators, possibilities of a bullish continuation are higher. This will also mean that STI will be attempting to break its immediate resistance at 2800 level. Once it is able to stay above this resistance level, it will then be able to seek its next resistance at 2900 level. However, for this scenario to be more achievable, trading volume must set in. Therefore, another key consideration for this rebound to happen is to have stronger market participation.

 

If trading volume fails to kick in, the rebound will unlikely to be sustainable during the week. 2800 resistance level will then be holding firmly. If this resistance level holds, it will mean that STI will be running a risk of forming lower high. Lower high formation can lead to confirmation in downtrend formation. If this happens, STI will then experience further selling pressure that will eventually break 2740 support level. Being said that, this does not mean STI will not turn out to be sideways. There is still a possibility that it will happen.

 

In conclusion, the Straits Times Index is now at a key turning point right now. It can either revert to uptrend or start a new downtrend. Otherwise, it will just remain sideways. With indication from the indicators that STI will be able to continue its rebound, it must first break the resistance at 2800 level. This breakout must come with conviction of high trading volume. If trading volume sets in, STI will then be able to reach its next resistance level of 2900. However, STI is still running the risk of downtrend formation. If it fails to break 2800 level and sustain, it will mean that selling pressure will set in to push STI towards 2740 level. Once 2740 level breaks, downtrend will be confirmed and this will lead to further downside movement. Therefore, we must be prudent to react during this week.

 

What to watch out for this week:

1)      Testing of 2800 resistance level

2)      Breaking of 2800 resistance level

3)      Testing of 2740 support level

4)      Breaking of 2740 support level

 Trading strategy to adapt right now:

-          Long traders should be cautious at this stage.

-          Shortists are to watch for clear bearish signs.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.        

Straits Times Index held firmly at its support level.

RSS - Mon, 05/23/2016 - 05:16
Straits Times Index held firmly at its support level.

Rebound actions were seen in Straits Times Index last week as market participants were looking for bargains. 2740 support level was recovered during the week but volatility is still seen. The key motivating factor for the price surge is the rebound in oil prices. Offshores counters were seen recovering from their lowest. Other stock components were also able to continue their bullish streaks. However, as the month of June is getting nearer, market starts to get more anxious of the decision of US Feb government’s decision on its possible interest rate hikes. With this concern, STI’s upside was limited and hence, only 28.91pts was gained. STI ended at 2763.82 level.

With growing concerns in the market, many were questioning the sustainability of this rebound. Will STI be able to maintain its bullish streak this week?

Trend: Uptrend formation failed to sustain, 20 wma starting to turn down, MacD near 0 level.

Support: 2740 (20 week MA), 2670, 2620, 2530

 Resistance: 2800, 2900, 2950

Observations:

Candlestick – White candle with longer upper shadow.

Histogram – 4Rs. MacD close to 0 line

RSI – At 62.8%. Bounce off 50% line.

Stochastic – At 10.7%. Oversold.

Bollinger Band –At mid line. Flat band.

Conclusion:

STI became a little more decisive after last week’s rebound. White candle was formed and this indicates that bullishness has returned to the market and its support at 2740 level is retained. However, its upper shadow formation had indicated that STI is also facing resistance at 2800 level. This resistance level is holding well and will likely to cap STI’s upside. With this action, it is hard to determine whether STI will be reverting back to its uptrend movements. Hence, further confirmation can only be identified from the indicators.

 

Mid-term indicators are still showing indecisiveness as the uptrend movement is not reverted. MacD line is still trending close to the 0 level and did not show significant changes are last week’s bullish movement. RSI rebounded from the 50% line and this might be a good foundation for STI to revert the trend back to uptrend. Shorter-term indicators are on the bearish side despite the rebound last week. This indicates that the bearishness will likely to persist during the week but with the oversold readings from Stochastic, STI is unlikely to face strong selling pressure. Hence, selling pressure will likely to be weak this week.

 

With short-term indication of bearishness, STI might continue to test its support at 2740 level before further bullish conviction is to set in. Even if STI is able to gain bullish traction, it will likely to face resistance at 2800 level. Volatility in the market will likely to continue as market participants will likely to be indecisive this week. Therefore, it is more likely that STI will be trading in a tight narrow range between 2740 – 2800 level. Oil prices movement will continue to be the main catalyst of market movement for this week.

 

We should also not rule out the possibilities of an upside breakout this week. With RSI showing resilient in dropping below 50% level, STI can attempt to break the resistance at 2800 level. If 2800 resistance level is broken, STI might attempt reverting its trend back to uptrend. This will mean that it will face the next resistance at 2900 level. 2900 level will then be a tougher resistance level to break as 50 week MA resistance line trend at that level. Hence, the upside should be capped at that level.

 

In conclusion, the Straits Times Index is likely to continue to face bearish pressure this week. However, with its oversold situation, the support level at 2740 level will likely to hold firmly. As long as this support level holds, STI will still be able to attempt to test 2800 resistance level. Oil price movement will be the main catalyst to determine whether STI will be able to break 2800 level. If oil price is able to continue to rebound, 2800 should be able to break easily. Once this resistance level is cleared, STI will then seek to test its next resistance at 2900 level. 2900 resistance level is a strong resistance level which STI’s upside will be capped.

 

What to watch out for this week:

1)      Testing of 2740 support level

2)      Testing of 2800 resistance level

3)      Breaking of 2800 resistance level

4)      Testing of 2900 resistance level

 Trading strategy to adapt right now:

-          Long traders should start considering taking partial profits.

-          Shortists are to watch for clear bearish signs.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.               

Straits Times Index entering oversold zone

RSS - Mon, 05/16/2016 - 04:41
Straits Times Index entering oversold zone

Straits Times Index managed to halt its decline after 2 weeks of substantial drop. Companies’ earnings report continued last week but most of the index component had finished reporting their earnings. Market participants seem to start digesting the new information from the latest earnings report which caused majority of them to stay sideline. Buying attempts were seen during the week but very often, they met selling pressure whenever it attempted to reach 2760 level. Therefore, STI was seen trading between a tight range of 2713 – 2766 levels during the week. Indecisive actions were definitely seen during the week. Hence, STI closed the week with only 4.11pts up. Ending at 2734.91 level.

The key question many are asking right now: “Have STI finished its decline after last week’s movement?” Let’s look at the chart to determine the likely direction.

Trend: Uptrend formation failed to sustain, 20 wma starting to turn down, MacD near 0 level.

Support: 2670, 2620, 2530

 Resistance: 2740 (20 week MA), 2800, 2900

Observations:

Candlestick – Black star like candle.

Histogram – 3Rs. MacD close to 0 line

RSI – At 56%. Near 50% line.

Stochastic – At 14.1%. Entering oversold.

Bollinger Band –At mid line. Band flattening.

Conclusion:

STI is clearly showing indecisive action last week. It is good to see that STI’s decline is coming to a halt after 2 days worth of decline. With this action, it can also mean that STI might be forming a support around 2740 level. But it also can mean that it is merely consolidating to make sure that 2740 support level is broken before it will attempt to slide down further. Therefore, it is very uncertain on whether STI is forming a new downtrend or it is undergoing a whipsaw action while forming its uptrend formation. Various possible scenarios should be explored before we can draw conclusive decisions.

 

Mid-term indicators continued to show indecisiveness despite skewing towards the bearish side.  Further decisive movements are needed before the Mid-term indicators can be clear. Shorter term indicators had extended their bearishness last week. Stochastic is now entering oversold region which indicates that the bearish momentum is starting to get more limited. However, there is no clear indication of rebound action yet. Therefore, further selling pressure might persist early this week.

 

With the possibilities of further selling pressure to start this week, it is still important to determine the support level of STI. STI’s support level is currently at 2670 level. This support level has yet to be tested last week. Hence, there is a possibility that STI might seek to test this support level this week. However, based on the oversold situation, STI might not be able to break this support level. This support level will likely to hold firmly this week. Even if it breaks, the next support level is near. 2620 level will likely to be the last line of defence.

 

Last week’s movement also gave some hope for the bullish side. The rebound attempts during the week can also signal a consolidation movement to form its support at around 2740 level. However, the main problem that STI is facing right now is the 20 weekly ma line. It is how trending at 2760 level which seems to be resisting STI’s upside attempt. A rebound can only happen if STI is able to break this resistance line. Therefore, if STI is able to trade higher than 2760 level this week, it will mean that the downside has ended. After which, STI will be seeking for its immediate resistance at 2800 level.

 

In conclusion, the Straits Times Index is likely to start the week with some bearish pressure. However, rebound attempts will still likely to happen this week. In order for the rebound to be successful, STI must first be able to break its 20 week MA line at 2760 level first. Upon achieving that, STI will be heading towards its resistance at 2800 level. However, if it fails to break the MA resistance line, selling pressure will likely to continue to set in to push STI towards its support at 2670 level.

 

What to watch out for this week:

1)      Testing of 2670 support level

2)      Breaking of 2670 support level

3)      Testing of 2620 support level

4)      Testing of 2800 resistance level

 Trading strategy to adapt right now:

-          Long traders should look for rebound opportunity.

-          Shortists should take profit on the way down.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.        

Straits Times Index suffering "Sell in May" effect.

RSS - Mon, 05/09/2016 - 04:50
Straits Times Index suffering "Sell in May" effect.

Straits Times Index experienced another week of sell down as many quoted the euphoric phenomenon called “Sell in May and go away”. Some blamed the sell down to be triggered by concerns of world economic situation while some blamed the weak corporate earnings that were announced for the past few weeks. Personally, I deemed the weak market sentiment to be because of the weak corporate earnings that are being announced. On top of that, numerous component stocks had gone “Ex-dividend”; a pattern that I usually see it happening during the May period. With all the various reasoning, STI failed to sustain its important support level at 2800 level. Once this support level broke, traders will rush to exit the market. Next support level at 2740 level was also being tested. On Friday, this support level failed to hold and it broke slightly. Hence, STI ended the week with 107.72pts down, closing at 2730.8 level.

With this bearish momentum continuing, many are concerned on how low STI will go this time round. Hence, we should use the chart to determine on the different possibilities.

Trend: Uptrend formation failed to sustain, 20 wma starting to turn down, MacD near 0 level.

Support: 2670, 2620, 2530

 Resistance: 2740 (20 week MA), 2800, 2900

Observations:

Candlestick – Long Black Candle.

Histogram – 2R. MacD close to 0 line

RSI – At 55.5%. Heading towards 50% line.

Stochastic – At 40.3%. Bearish crossover confirmed.

Bollinger Band –At mid line. Band flattening.

Conclusion:

STI had broken another support level at 2800 level last week. This is an important support level to determine whether STI will be retaining its uptrend formation. Since it broke last week, it will only mean that STI will not be continuing its uptrend formation. With this, it will also mean that STI could be starting to form a downtrend. Lower low will likely to be forming next and hence, it is important to determine the support level where STI will likely to form the lower low. We will have to check with the indicators to determine the odds of rebound at support level before we can draw conclusive possibilities.

 

Mid-term indicators are starting to skew back towards the bearish side again after last week’s bearish movement. This might mean reverting back to bearish momentum. Shorter term indicators are obviously on the bearish side. It will also mean that the bearish pressure will likely to continue for STI. Thus, preventing STI from advancing for a rebound movement.

 

With the bearish sentiment likely to dominate the market, it will mean that STI might not be able to recover back its support at 2740 level. Failure to recover this level will mean that STI will be seeking the next support level. Next support level stands at 2670 level. Although, this might be a good support level for STI to rebound, there is another strong support level. 2620 support level is a stronger support level. This support level will be a better candidate for a rebound to happen.

 

Despite looking at the bearish possibility, it is important to look at another possibility. Traditionally, May can be a very volatile period that has lots of whipsaws. Hence, if STI is able to quickly recover its support at 2740 level, a rebound can also happen. 2800 resistance level will then be tested. This resistance level is likely to cap STI’s upside as downtrend formation possibility is high right now. However, if 2800 resistance level fails to hold, it will throw the charts to a state of confusion which will then be hard to determine the next movement.

 

In conclusion, the Straits Times Index is likely to form downtrend currently. With 2740 support level being broken, STI will then be heading towards its next support level at 2670 level. 2670 support level might not be able to hold well and hence, STI might be seeking for its next support level at 2620 level before it can rebound. Upside will be capped by 2800 resistance level if STI attempts to recover its support at 2740 level. Volatility is likely to continue this week; this makes it harder to anticipate how the market will behave.

 

What to watch out for this week:

1)      Testing of 2670 support level

2)      Breaking of 2670 support level

3)      Testing of 2620 support level

4)      Testing of 2800 resistance level

 Trading strategy to adapt right now:

-          Long traders should look for rebound opportunity.

-          Shortists should take profit on the way down.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.

1st Quarter Earnings Season affect performance of Straits Time Index

RSS - Tue, 05/03/2016 - 05:06
1st Quarter Earnings Season affect performance of Straits Time Index

Last week turns out to be a bearish week for Straits Times Index as first quarter earnings reporting season comes to a peak. Many companies suffered lower in earnings which could have cause market participants to exit the market last week. Concerns of US interest rate hikes continue to weigh on the market last week. Therefore, STI was seen not be able to go beyond 2950 resistance level despite its strong breakout at 2900 resistance level. Furthermore, it failed to stay above 2900 level last Tuesday. With the failure to hold above 2900 level, Traders starts to rush on the bearish side with created further down pressure on STI. Hence, STI was seen closing 101.91pts down. Ending at 2838.52 level.

Many reports are citing for further bearishness in the market. Some went to the extent of calling for a continuation of downtrend action. How can we confirm their citation?

Let’s review the chart of STI for the confirmation.

Trend: Possibility of switching to uptrend, 20 wma turning slightly up, MacD near 0 level.

Support: 2800 (20 week MA), 2740, 2680

 Resistance: 2900, 2950 (50 Week MA), 3020, 3080

Observations:

Candlestick – Long Black Candle.

Histogram – Turned 1R. MacD closing to 0 line

RSI – At 65%. Near 70% line.

Stochastic – At 72%. Nearing overbought.

Bollinger Band –Between mid and upper band. Band contracting.

Conclusion:

STI had failed to sustain its important support level at 2900 level last week. This movement had totally thrown off the possibilities of STI heading towards 3020 resistance level. Hence, we can conclude that there is a failure in breakout for uptrend and this will also mean that STI might have failed to form its uptrend formation. With all these happenings, it is important to re-evaluate new possibilities for STI right now. Uptrend formation does still have opportunity to form despite last week’s movement but the key now is to identify which are the levels that will lead STI to lose its opportunity of uptrend formation.

 

Mid-term indicators are still struggling to confirm its uptrend formation. Last week’s movement have forced them to remain in the bearish territory and hence, it is hard to determine whether the trend had truly reversing. Shorter-term indicators had also flipped to the bearish side quickly after last week’s movement. The abrupt movement by STI last week have thrown the indicators to an unpredictable fashion.

 

Indicators had failed to show a clear picture of whether STI is confirming its uptrend formation or starting its downtrend formation. Hence, the only thing that we can rely on right now is to determine the trend using the highs and lows. STI had formed a higher low formation at 2800 support level. This higher low formation is where the possibility of uptrend formation is being heightened. Therefore, 2800 level will be the key support for uptrend formation. Failure to hold above this support level at 2800 will mean that STI’s uptrend formation have turned into a downtrend formation. Failure to hold at this support level can lead STI to head towards its support at 2740 or 2670 level.

 

There is another possibility that STI might be seeking this week. What if STI is to hold at its support at 2800 level? Holding at 2800 support level will mean that STI will be consolidating for a sideways movement between 2800 to 2950 range before it can have a much more conclusive movement. When this happens, it will also mean that there will still be possibilities of STI forming its uptrend movement again. The last possibility is that STI will be rebounding before it is able to reach 2800 level; without testing 2800 support level. When this happens, it will mean that STI will be forming a higher low formation.

 

In conclusion, the Straits Times Index is currently at the crucial point of determining whether uptrend will continue or downtrend will be forming. 2800 support level is determined to be the key support level to defend STI’s uptrend possibility. If 2800 support level fails to hold, downtrend pressure will start to form and it will likely to bring STI towards 2740 or even 2670 level. With the current 1st quarter reporting period, majority of the earnings are lowered. Lower earnings will likely to impact on STI this week. Hence, we must be prudent in stock selection during this week in order to avoid any unexpected situations.

 

What to watch out for this week:

1)      Testing of 2800 support level

2)      Breaking of 2900 support level

3)      Testing of 2900 resistance level

4)      Testing of 2740 support level

 Trading strategy to adapt right now:

-          Long traders should stay cautious

-          Shortists can consider some short positions if there is confirmation of downtrend formation.

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.        

Straits Times Index to attempt to establish further uptrend movements.

RSS - Mon, 04/25/2016 - 05:12
Straits Times Index to attempt to establish further uptrend movements.

Straits Times Index managed a bullish week last week as the market enters the quarterly earnings season. Numerous companies were reporting lowering in earnings but this did not stopped STI from heading higher. It started the week by holding firmly at 2900 support level which it managed to break last week. This gave much assurance that STI’s underlying momentum is now bullish. Hence, it attempted to test its next resistance level at 2950 level. This resistance level was seen capping STI’s upside for the week. Therefore, STI closed the week at 2940.43 level with 16.49pts up.

With more earnings to be reported this week, will STI be able to sustain its bullishness? Will profit taking actions start to happen this week?

Let’s identify whether profit taking will happen this week.

Trend: Possibility of switching to uptrend, 20 wma turning slightly up, MacD nearing 0 level.

Support: 2900, 2800 (20 week MA), 2740, 2680

 Resistance: 2950 (50 Week MA), 3020, 3080

Observations:

Candlestick – Short White Candle with upper body.

Histogram – 2 Gs. MacD closing to 0 line

RSI – At 46.1%. Facing RSI resistance.

Stochastic – At 68.8%. Nearing overbought.

Bollinger Band –Closer to upper band. Band expanding.

Conclusion:

STI had clearly confirmed its breakout of 2900 resistance level last week. With its reluctance of dropping lower than 2900 level last week, it indicates that STI is now forming a higher high formation. Coupled with a higher low formation on the previous week, it is more certain that STI is now in an uptrending mode. With this, it is likely that STI will continue to attempt to trade higher. However, with such sharp rise in prices over the last 2 weeks, there is also a likelihood of profit taking action currently. Therefore, it is important to look at the indicators to identify if this bullish strength will be sustainable for this week.

 

Mid-term indicators’ momentum is getting clearer in its reversal to bullish one. 20 weekly MA line is starting to angle itself upwards after last week’s bullish closing. MacD line is now close to the 0 level which can be an indication of reversal confirmation. Therefore, STI is indeed in the midst of trend reversal. Shorter-term indicators are now showing bullish signs. In particularly, the Stochastic as it formed a bullish crossover. This will mean that the bullish momentum will likely to be retained for this week.

 

It is possible that STI will be attempting to head higher this week as the indicators are in favour of further upside movement. However, what STI will be facing right now is a strong resistance level at 2950 level. This resistance level confluences with the 50 week MA line. Hence, it will be a tougher resistance level to break currently. If the bullish momentum is strong, it should not have a problem breaking this resistance level. Once this resistance level is broken, STI will then be heading towards its next resistance at 3020 level.

 

If this bullish possibility fails, STI will likely to face profit taking pressure. From the daily charts, it is clear that STI is in a short-term overbought mode with bearish indications. Therefore, STI will likely to start the week with a bearish start. This bearish retracement will likely to help STI to setup for further upside movement. The first support level that STI will likely to test is at its gap support between 2917 – 2928 levels. This support level will likely to hold as STI’s underlying bullish strength is still intact. Even if it fails to hold, the strong support level at 2900 level will prevent STI from dropping further.

 

In conclusion, the Straits Times Index might start off the week with some profit taking action which will likely to push it towards its gap support between 2917 - 2928 levels. Even if this support level fails to hold, STI will likely to be supported at a strong support level at 2900 level. After this support level is being confirmed, STI will then attempt to head towards 2950 resistance level. 2950 resistance level is a strong resistance level which STI might take time to break it. Hence, going beyond 2950 resistance level is unlikely to happen for this week.

 

What to watch out for this week:

1)      Testing of 2917 – 2928 gap support level

2)      Testing of 2900 support level

3)      Testing of 2950 resistance level

 Trading strategy to adapt right now:

-          Long traders should consider to buy when there is bullish reversal at support level

-          Shortists should stay cautious

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.        

Straits Times Index's trading range will tighten further as it trades lower.

RSS - Mon, 04/11/2016 - 05:15
Straits Times Index's trading range will tighten further as it trades lower.

It was another bearish week for Straits Times Index as uncertainties of the global economic outlook and oil prices continue to linger on market participants’ mind. The week was seen trading in a tight range. It started with an attempt to rebound but it failed to sustain the rebound the next day as it faced resistance at around 2840 level where the 20 day MA line is. When the rebound failed to sustain, the support at 2815 level also failed to sustain. For the rest of the week, STI attempted to recover its support level at 2815 level but it failed to do so. Furthermore, there was also lacked of selling pressure during the week. Due the tight trading range, STI’s trading volume was also seen declining. For the week, STI lost 10.17pts and close at 2808.32 level.

Many might have thought that STI is starting to consolidate last week and might prepare for a rebound action. Will it be ready to rebound this week?

Let’s identify the signs of rebound from the chart.

Trend: Possibility of switching to uptrend, 20 wma turning flat, MacD below 0 level.

Support: 2740 (20 week MA), 2680, 2540

 Resistance: 2815, 2900, 2950 (50 Week MA)

Observations:

Candlestick – Short black candle.

Histogram – Bearish signal confirmed. MacD closing to 0 line

RSI – At 46.1%. Facing RSI resistance.

Stochastic – At 58.7%. Out of overbought.

Bollinger Band –Closer to mid band. Band squeezing.

Conclusion:

STI’s broken down of 2815 support level had confirmed its possibilities of heading for a much lower support level. The next support level that STI will attempt to head towards is at 2740 level. It seems pretty reluctant to go lower last week. This might give some clues that STI does still have some bullish underlying to prevent any sharp fall. However, in order for strong confirmation of bullish underlying, STI must first be able to recover back above 2815 level this week. Otherwise, it will still be facing bearish pressure until its support at 2740 level. The indicators should give us a clearer understanding of what will likely to happen this week.

 

Mid-term indicators’ momentum reversal possibilities are still high right now. MacD continues to head toward the zero line despite a continuation of 3 bearish weeks. There are no signs of bearish crossover yet and hence, it implies that there might still be bullish strength to reverse the market. Shorter term indicators are also on the bearish side. They are still fresh in the bearishness and this will likely to lead to further bearish momentum to happen this week. There are no signs of bullishness currently and hence, STI will be more likely to face bearish pressure this week.

 

With assurance from the shorter term indicators, STI will likely to continue to face selling pressure for this week. Hence, STI will likely to continue its attempt to test its next support level at 2740 level. However, it is also unlikely that STI will be facing strong selling pressure currently as there is strong bullish underlying which can attempt to reverse the current trend of STI. It will be good to stay prudent by not exposing on the downside.

 

As the possibilities of trend reversal is still intact, we cannot rule out the possibilities of STI attempting a rebound this week despite breaking its support level at 2815 level. A rebound can happen again if STI is able to recover above its support level at 2815 level this week. If this happens, a higher low formation will be formed and this will then lead to further upside movement. Thus, confirming the uptrend formation.

 

In conclusion, the Straits Times Index will likely to continue to face bearish pressure this week. The bearish pressure will likely to persist till it reaches the support level at 2740 level or it recover itself above 2815 level. Selling pressure is unlikely to be strong this week as the underlying bullishness will likely to continue to be firm. Therefore, one can expect this week to be another tight trading range week with higher chances on the bearish side. The trading range might be seen between 2740 – 2815 level for this week.

 

What to watch out for this week:

1)      Testing of 2740 support level

2)      Breaking of 2815 resistance level

3)      Breaking of 2740 support level

4)      Testing of 2900 resistance level

 Trading strategy to adapt right now:

-          Long traders should consider to buy when there is bullish reversal at support level

-          Shortists should stay cautious

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

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*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.        

Straits Times Index hit by Banks Downgrade by Moody

RSS - Mon, 04/04/2016 - 05:21
Straits Times Index hit by Banks Downgrade by Moody

Profit taking continues to be seen in the market last week. Market participants are lacking of confidence to hold on to their positions are many are anticipating further bad news. There was a strong rebound during the mid of the week but it failed to sustain. Moody had downgraded the banks of Singapore to negative rating. This caused the bank stocks to face downward pressure after the report. Support level at 2815 level was tested twice during the week and it managed to hold well. In the current sentiment, it will be hard for market participants to find reasons to buy. Hence, STI closed at 2818.49 level with 28.9pts down.

With further bearish sentiment setting in, will STI continue the bearishness this week? Or will it attempt to rebound again?

Let’s evaluate STI’s chart to find out the chances.

Trend: Possibility of switching to uptrend, 20 wma turning flat, MacD below 0 level.

Support: 2815 , 2740 (20 week MA), 2680

 Resistance: 2900, 2950, 3020 (50 Week MA)

Observations:

Candlestick – Black Candle.

Histogram – Bearish signal. MacD closing to 0 line

RSI – At 46.8%. Facing RSI resistance.

Stochastic – At 82.8%. Overbought. Bearish crossover seen.

Bollinger Band –Close to mid band. Band squeezing.

Conclusion:

STI had confirmed its resistance level at 2900 level after confirming the bearish reversal pattern. This indicates that STI will probably face further bearish pressure in this coming week. 2815 support level was being tested and this cannot indicate that STI will be rebounding from this support level. Further studies are needed to determine whether STI will be holding at this support level this week. The indicators should be able to give a much clearer indication.

 

Mid-term indicators are still showing signs of reversal despite the bearish closing last week. RSI resistance is still holding strongly and this indicates that STI might continue to face further downward pressure. Shorter-term indicators are clearly showing bearish signals which will likely to push STI down further. Therefore, it is clear that STI will likely to continue to face bearish pressure this week before it can attempt a rebound.

 

Thus, STI will likely to attempt to break its support at 2815 level this week. Once this support level is broken, it will then be heading towards its next support level at 2740 level. 2740 support level will likely to be a stronger support level as it confluences with the 20 weekly MA line. Hence, it is more likely that STI will be able to form a higher low formation at this support level. However, even if this support level fails to hold, the next support level at 2670 level will unlikely to break so easily too.

 

Possibilities of a trend reversal in STI are still very likely to happen right now despite the bearish movements for the past 2 weeks. What STI is lacking right now is a higher low formation. Once higher low formation is formed, STI will then be able to attempt to test the resistance at 2900 level again. Breaking 2900 resistance level will mean that the uptrend formation is confirmed and thus, STI will be continuing its uptrend movement.

 

In conclusion, the Straits Times Index will face further bearish pressure this week. 2815 support level will likely to be broken this week so as that STI will be able to find a firmer foothold at 2740 support level. 2740 support level is proved to be the best level for STI to form its higher low formation. Once higher low formation is formed, STI will then be able to start its uptrend formation and resistance at 2900 level will be tested again.

 

What to watch out for this week:

1)      Testing of 2815 support level

2)      Breaking of 2815 support level

3)      Testing of 2740 support level

4)      Testing of 2900 resistance level

 Trading strategy to adapt right now:

-          Long traders should consider to buy when there is bullish reversal at support level

-          Shortists should stay cautious

 

This market analysis is part of the premium services that is provided to Jay Chia’s clients. If you would like to find out on what other premium services Jay Chia provides, please visit www.Jay-Chia.com. You can also contact Jay Chia through the website.

Like Jay Chia’s Facebook page to receive more market opinions now!
https://www.facebook.com/JayChia.Mentor/

 

*Disclaimer:

This analysis is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to purchase or sell the product mentioned. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of you acting based on this information. Investments are subject to investment risks.

Please consult your respective advisers.