STI index - not looking good

Global equity market shares followed a large sell off for the past few days. Things are looking gloomy at the moment with the Singapore index losing over 150 points since Monday almost 500 points or 15% off the peak about 7 months ago. Bad news just kept coming one after another, since the selling off of emerging market coupled with tapering of the US fed, and bad growth data from China and US economy. So will the selling continue or will it bounce off into recovery?

From the weekly index chart above, we can see that the price has gone down to test the support level of previous low at around 3025(bold brown horizontal line), giving the possibility of forming a lower low. The price has also dipped slightly below the uptrend line, as shown by the thing brown upward line, re-testing the strength of uptrend line. Any break down with force below both line should indicate the end of current uptrend.

Another thing to note is the formation of lower highs over the past few month, which the chart forms a descending triangle formation with the down sloping blue line. As descending triangle is usually a bearish pattern, things are looking even more gloomy. As for MACD and Stochastic indicators, both points to increasing strength in downside movement. MACD is moving away from its signal line and moving towards a lower low compared to the low in Sep'13. Stochastic is also moving back down after just scrapping the 60-mark.

Positive things from the chart are the possible formation of a mini double bottom (circled in red on the price chart) if the price manages to hold above the 3000 level for this week and/or the formation of the descending triangle is more of a continuation rather than a bearish pattern. (triangle are continuation patterns) BUT most indications are pointing otherwise. Just remember to trade/invest within your means and run before things turn really ugly, watch out for the break!

Nam Cheong - Another good entry opportunity.

post first. will update post again later. brief description is in the picture. night.

Update:
As seen from the chart, Nam Cheong was sold down to $0.305 level on 27 Jan, the sell down was mainly inline with the peak and trough of uptrend chart, however going down to $0.305 level seems abit too much as it is hits the 50ma support level with speed. The heavy sell down is likely due to recent poor sentiments on Asia markets, especially the emerging markets. However, as sentiments soon stabilizes, and Nam Cheong bounds right back up (on 28 Jan)

Charts shows good support @ the 50ma level, with stochastic reaching its low (below 20) and moving back up towards the signal line and 20 line. MACD also show declining strength of the negative MACD histogram and is moving closer to its signal line.

From the candle stick patterns, the gap down on 27 Jan might be last of the sellers liquidating all holdings to get out likely due to profit taking, coupled with poor market sentiments. However, the gap up on 28 Jan shows that this is an exhaustive gap and that selling pressures is diminishing, hence the gap is quickly filled as the price reverses with little remaining sellers. Price action shows that uptrend channel is still firmly intact, with first trough hitting the 50ma support since the break out above $0.300. This gives a good buying opportunity for those who missed out on the ascending triangle break out few weeks ago. A good entry price would be around $0.310 with tight cut loss at $0.300 (5%) of break out price.

Cheers! and please share my blog if you have profit.

p/s: current market sentiment is weak, due to weakening of emerging market and poor data statistic from China and Europe, hence cutting loss is very important when things start to go south. And lastly, please trade within your means.

RH Petrogas - short term up trend broken

After over a month of short term uptrend, RH seems to be unable to break resistance of $0.64 and has come down from there. The narrow uptrend channel has been broken, with current price supported at 150ma level $0.585. Any further downwards pressure could see 150ma support broken and price test $0.560. Any further break will see price move towards $0.50.

Things are not looking good as MACD has crossed its signal line and seem to be crossing the center line soon, which will signal a change from uptrend to downtrend in the near term. Price has also touched the lower bollinger band for the first time since the narrow uptrend which shows a gain in downwards pressure. Coupled with poor market sentiments throughout the whole Asia market, it would be better to get out and wait for recovery (if any)