SGX – Rebound in the cards?

Trend: Downtrend, 20ma down, MacD below 0

Support: 7.36, 7.19

Resistance: 7.56 (20ma & 50ma),7.66 (100ma), 7.85 (200ma close)

Observations
Candlestick – Black inverted Hammer.
Histogram – 2G. No Bullish Divergence.
RSI – Oversold. No Bullish Divergence.
Stochastic – Bullish Crossover. Oversold.
Bollinger Band – Close to lower band.

Conclusion:
SGX has been dropping close to 2 weeks without any significant rebound. Many might find that SGX might be trading at a “cheap” stock. Is SGX really that “cheap” right now? Is SGX going to make a rebound?
The current trend of SGX is downtrend but yet to form a significant lower high. Based on yesterday’s price, it is currently trading close to a support level of 7.36 level. On top of that, Inverted hammers have been appearing at this support level signifying that there could be a potential reversal. Indicators are also starting to indicate bullish signal in an oversold condition. Therefore, the chances of rebound could be pretty high. However, if there is no confirmation of reversal, this support of 7.36 might crack and seek the next level of 7.19 for support.
But as the trend is downtrend, its upside movement could be capped by immediate resistance of 7.56 level where it could confluence with 20 & 50ma. However, if the rebound is a strong rebound, it might even test 7.66 level as resistance. In order for SGX to turn into uptrend, it must break 7.85 resistance level before a higher high could be formed.
In conclusion, the rebound for a formation of lower low could soon be seen. But this rebound could be capped by 7.56 or 7.66 resistance level. Hence, if one is to go long on this position, one must be aware of the risk of trading counter trend.
What to watch out for this week:
1) Confirmation of the bullish signal at 7.36 support
2) Breaking of 7.36 support level

Trading strategy to adapt right now:
- Long when there is confirmation of the bullish signal.

*Disclaimer applies