Island Reversal for STI

Fig 1 STI Weekly Chart


Fig 2 STI Daily Chart


Fig 3 Properties Weekly Chart

It has been exactly 1 week since my last update on this blog. I was away for a course in Malaysia on taking bath. Not that I do not know how to do it, but its application on health. Seems like the tide has turned while I was away. when I came back on Friday, I virtually could not do anything except to watch the STI moves. One thing I have promised myself is not to do anything unless I have looked into my chart, which is one of the short fall of my system.

It seems now that the tide is turning with the completion of the A wave. The indicators on the weekly chart is reversing. the downtrend is now supported by the 89 weeks EMA @ 2,267. However, now support turn resistance at those levels that I have mentioned earlier, mainly @ 2,398 and 2,455, 2,351 has just been shot through.

On the daily chart, the index gapped up, mirroring its top formation. Again we are seeing an island reversal. The gap up comes with volume which I find is encouraging. The indicators for the daily chart are also pointing north this time. The resistance level comes from the 89 days EMa which is presently hovering at 2,455. I believe this is where the STI might be stopped.

Now one concern I have it the STI breaching of its supporting trendline, now a resistance to its progress. throughout the years, I understand that breaching of the trendline may not mean trend reversal. The thing is that there tends to be 3 trendlines at various angles, 30Deg, 45 Deg and 60 Deg. It is likely that STI may progress to a trend of lesser gradient. Further more, I have also found that the moving averages also makes a good candidate for a trendline. I find it to be more reliable.

Earlier I have noted down that I could not yet declare for myself that the trend is turned and bear has set in. On a daily basis, 55 days crossed 89 days EMA marginally. However, I am finding the crossing to be quite shallow still, so monitoring is needed.

I have also attached to this blog the properties index. I find it quite interesting when compared with the STI. When looking at STI weekly chart, the previous high actually failed to support the drop and only stopped at the bottom of A of wave 4. I somehow feel that this is a weakness in STI. Although officially we are moving up ward, it is worthwhile to be caution. Property on the other hand is well supported by its previous high. This makes me feel that it would be safer to put my money into stocks relating to properties. Why only properties? Unfortunately when I scanned though all the indices, this is the only thing that caught my attention even though most indices are pointing up wards ( except Construction sector ).