Prediction on STI Daily

I am relatively free from the stock market today since I have sold my last stock yesterday. Even so, I spied on the few stocks that I have dumped. My instinct is at least good for 1 day prediction.

While my stocks went lower, the index did a partial retracement of 20 points at the end of the day, penetrating the previous low. The question is whether it would be good enough to qualify for a reversal?



Fig 1 STI Daily

Fig 1 shows a thrusting pattern on Candle Stick, right after an evening star. This pattern is normally an indication of continuation rather than reversal, so tomorrow's performance will be a crucial confirmation, however, judging from its earlier Evening Star pattern, it is likely to continue its way down.

There are a few levels of support for STI on daily structure. Its trend support is 2,508, while the 21 days Moving Average at 2,552. At present the Stochastic is reversing down, possibly a second bottom or creating a divergence. RSI on the other hand is only half way down, I am not too sure of its direction because it seems to be congesting.



Fig 2 STI weekly chart

Since the lower time frame is governed by the higher time frame, it is always a requirement to at least check one time frame higher. On the weekly STI, its upward thrust is limited by the Gann Fan resistance at 2,604 while its trend support is only 2,485. Seems to me that position of STI is rather shaky at the moment. Its RSI and Stochastic are already trending downward. So does this mean a reversal downward?

The only savior so far as I guess would be the three white soldiers formation during its bull run, the formation is an indication of bull tendency. It is rarely that the three white soldiers would fail ( it didn't on Tiong Woon ). So in case of STI, I would still consider this as a correction. Afterall, no matter how I calculate, the Fibinacci number is still pointing to 2,809 for STI.

Having said that, I must still respect the market, if the market run against me, it only means that I am wrong, thus its back to the drawing board for me.