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“STI struggled very hard to trade higher yesterday as Asian market were trading lower yesterday. STI ended less than 1 point higher yesterday which did not confirm the bullish reversal pattern that was formed the previous day. There was lack of trading interest as traders continue to adopt cautious approach to the market. As DJI close red yesterday and today is a Friday, will STI trade lower today? Or will STI continue to hold its support level well? ”
“STI formed a small black candle with upper and lower shadows yesterday. This candle implies that STI is indecisive of its direction is could still be consolidating to form a support. Similar to the previous day, STI is still stuck between the 20ma and 100ma. Its upper and lower shadows imply that it neither can break the support and the resistance level. However, the indicators are starting to show signs of weakness in the bearish strength as the Stochastic formed a bullish crossover. If STI manage to close higher today, it will confirm the bullish crossover. For today, STI would still be likely to trading between the 20ma and 100ma levels. Trading above 100ma, which is 3098 level, will confirm the bullish signal by Stochastic. ”
“The banks continue to hold their support yesterday with some managed to end the day with a white candle. However, the white candle formation did not confirm the bullish reversal pattern that was formed the previous day. UOB which bounced off from the 20 and 50ma support showed that their chance of forming a higher low is now very high. This is due to confirmation of the bullish crossover in the Stochastic. Ocbc also showed similar occurrence in its chart. The offshore struggled to maintain its gains yesterday. Most of them gap up but failed to maintain its gains for the day and ended up lower. Interestingly, Sembcorp is the only one trading at 20ma as resistance level and might have trouble breaking it as there is a confluence of 50ma and 100ma at 5.02 level. Any upside for Sembcorp should be limited. ”
“The banks continue to hold their support yesterday with some managed to end the day with a white candle. However, the white candle formation did not confirm the bullish reversal pattern that was formed the previous day. UOB which bounced off from the 20 and 50ma support showed that their chance of forming a higher low is now very high. This is due to confirmation of the bullish crossover in the Stochastic. Ocbc also showed similar occurrence in its chart. The offshore struggled to maintain its gains yesterday. Most of them gap up but failed to maintain its gains for the day and ended up lower. Interestingly, Sembcorp is the only one trading at 20ma as resistance level and might have trouble breaking it as there is a confluence of 50ma and 100ma at 5.02 level. Any upside for Sembcorp should be limited. ”
In conclusion, as the range between 20ma and 100ma is getting narrower, STI might be trading in a very narrow range today. There are signs that STI might start to turn bullish in the short term, but STI might trade higher than 100ma today in order for the bullish signal to be confirmed. Hence, there is a high chance that STI might still continue to trade in the narrow range which could be consolidating for a firm support level at 3080. The banks and properties will continue to hold the support for STI but the offshore and commodities might drag the upside strength today. Therefore, I do not expect any heavy selling today while I also do not expect any strong buying today. Most likely, the trading actions for today will be less than yesterday. Going on the long side is still viable till today but cautious approach is a must. Shortist might want to make use of any weakness during the day to reduce or even close their short position as the support is getting stronger.
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