Currently STI is at 2850 at the point of writing.
Some technical points that I have observed and would like to share:
- STI is still in the downtrend channel, with no signs of 'moving out' of the down trend channel. The pink line (50 days Moving Average) has curved downwards, and the candles are still under the pink moving average line.
- I am looking to see if STI is able to break 2800 and touch 2700+.
3. Why 2700?
The chart below is STI during year 2011. During that time, it has fallen from 3200+ to 2500+. equivalent to 700 points. A first drop of 500 points, then another drop of 200 points subsequently.
Notice how strong the 2700 line was? Most of the time it is above 2700.
There are 3 long bottom candle wicks, indicating strong buy up nearing 2700 (red circles). This first happened 2- 3 weeks ago too at the 2800 range. (Refer to red circle on the first chart)
However, because it was not able to break 2900 on 3 occasions (green circle), it dipped once more briefly, moving sideways, before moving off from higher bottoms, to a higher high of 3000.
Zooming out on STI 2011, about 6 months later, it came down from a high of 3000+ as it got stuck at that level for a few months. Coming down from 3000, retested 2700 and hit a high of 3100.
STI was at a high of 3500 this year. Using 2011 as a reference with the similar drop of 700 points from 3400, it equates to 3400-700 = 2700+; a first drop of 500 points followed by a second drop of 200 points.
I marked down the dates 07/09/11 and 05/10/2011 as a reference. There are great similarities between 2011 and 2015, and I am curious to see how similar it will turn out to be.
If it holds, there should be another correction before moving off to a high of 3000.
Please note that this should be used as an estimate only.
For short term trading clients, you can use this to time your trades and take profits accordingly. As for long term investing clients, please spread your purchases so that you can choose to average it accordingly.
Nonetheless, please remember to lock in your profits along the way.
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