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STI managed to open higher in response to the overnight positive strength from the US market. The bullishness managed to maintain throughout the day until the Europe market opens. Europe’s opening session started with deep red due to concerns of the debt issues. This caused the STI to reverse their gains for the day and head into the negative territory. Hence, STI closed at 2729 level which broke the recent higher low at 2740 marginally. Last night, DJI managed to reverse it losses and end its day in positive note. Will STI be attempting to rebound again?
STI closed the day with a long black candle. Its price action yesterday managed to test the gap resistance and attempted to trade closer to the 20ma line. However, it failed to trade higher to test 2800 level and retreated before market closes. STI even closed below 2740 support level yesterday which will mean that STI is not forming any uptrend. Sideways is still to be expected for STI. As noted in the weekly outlook, the sideways support level is at 2680. Hence, STI should be heading towards that level. The short term indicators continue to show bearishness and this would greatly encourage STI to continue its bearishness towards 2680 support level.
The banks attempted to rebound yesterday but it failed to sustain their gains. On top of that, most of them ended lower. DBS was the worst hit as it ended 15 cts down. Its price action might indicate that it should be heading towards the next support at 12.00. The offshore also suffer the same fate as the banks. Very strong rebound was seen in the morning session but it was quick to die down when the Europe market open. Both Kepcorp and Sembmar managed to rebound till the level where they closed their gap resistance. However, they ended up with upper shadow which indicates that the gap resistance is still in play. Sembcorp on the other hand had broke its immediate support level and might be heading for a lower low formation.
The properties also attempted the rebound but only a handful managed to test the gap resistance. Citydev and Capitaland faced lack of buying strength which stopped them from testing the gap resistance. Although the properties were lack of buying strength, they managed to continue to hold their support level and have yet to break the support for a lower low movement. The commodities continue to hold firm above 20ma despite the bearish which sets in before the market closes. Majority of them also ended with a black candle signifying bearish momentum is still in play. Their trading directions are still unclear at this point in time.
In conclusion, STI’s attempt to rebound but ended up with a bearish closing indicates to us that the market’s underlying strength is still bearish. Sellers are more willing to sell than buyers due to lack of market confidence. With current economic climate full of debt issues, traders will more likely be very cautious in buying. Although DJI managed to end its day with a positive note, one must be cautious of whether yesterday’s episode will replay. Europe market will be the key to determine how STI would end for the day. As 2740 support is broken, it will be wise to assume STI to be heading towards 2680 support instead of hoping for a good rebound. Henceforth, Long traders must not get entice by any rebound currently as it could be a bull trap. Stay sidelines for Long traders should be a wiser choice. Shortist might get more confident on the short side as the bulls fails to dominate the market. Similar to yesterday, any rebound can be a good opportunity to execute short trades. However, be prudent with the stop loss levels as the market can be volatile currently.
STI managed to open higher in response to the overnight positive strength from the US market. The bullishness managed to maintain throughout the day until the Europe market opens. Europe’s opening session started with deep red due to concerns of the debt issues. This caused the STI to reverse their gains for the day and head into the negative territory. Hence, STI closed at 2729 level which broke the recent higher low at 2740 marginally. Last night, DJI managed to reverse it losses and end its day in positive note. Will STI be attempting to rebound again?
STI closed the day with a long black candle. Its price action yesterday managed to test the gap resistance and attempted to trade closer to the 20ma line. However, it failed to trade higher to test 2800 level and retreated before market closes. STI even closed below 2740 support level yesterday which will mean that STI is not forming any uptrend. Sideways is still to be expected for STI. As noted in the weekly outlook, the sideways support level is at 2680. Hence, STI should be heading towards that level. The short term indicators continue to show bearishness and this would greatly encourage STI to continue its bearishness towards 2680 support level.
The banks attempted to rebound yesterday but it failed to sustain their gains. On top of that, most of them ended lower. DBS was the worst hit as it ended 15 cts down. Its price action might indicate that it should be heading towards the next support at 12.00. The offshore also suffer the same fate as the banks. Very strong rebound was seen in the morning session but it was quick to die down when the Europe market open. Both Kepcorp and Sembmar managed to rebound till the level where they closed their gap resistance. However, they ended up with upper shadow which indicates that the gap resistance is still in play. Sembcorp on the other hand had broke its immediate support level and might be heading for a lower low formation.
The properties also attempted the rebound but only a handful managed to test the gap resistance. Citydev and Capitaland faced lack of buying strength which stopped them from testing the gap resistance. Although the properties were lack of buying strength, they managed to continue to hold their support level and have yet to break the support for a lower low movement. The commodities continue to hold firm above 20ma despite the bearish which sets in before the market closes. Majority of them also ended with a black candle signifying bearish momentum is still in play. Their trading directions are still unclear at this point in time.
In conclusion, STI’s attempt to rebound but ended up with a bearish closing indicates to us that the market’s underlying strength is still bearish. Sellers are more willing to sell than buyers due to lack of market confidence. With current economic climate full of debt issues, traders will more likely be very cautious in buying. Although DJI managed to end its day with a positive note, one must be cautious of whether yesterday’s episode will replay. Europe market will be the key to determine how STI would end for the day. As 2740 support is broken, it will be wise to assume STI to be heading towards 2680 support instead of hoping for a good rebound. Henceforth, Long traders must not get entice by any rebound currently as it could be a bull trap. Stay sidelines for Long traders should be a wiser choice. Shortist might get more confident on the short side as the bulls fails to dominate the market. Similar to yesterday, any rebound can be a good opportunity to execute short trades. However, be prudent with the stop loss levels as the market can be volatile currently.
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