Following the gap down on Straits Time index 2 days ago, STI indeed plunging down further. STI finally broke the 3000 point psychological support level today when it opened this morning. Well, luckily, it started to recapture losing ground in the afternoon trading and ended with a white candle to close higher than 3000 points at closing.
Even though a white candle shows possible recovery or reversal, however, the overall volume is still lower than average. There is no increase of participation in the market. Volume is the fuel, rocket is not able to take off from the ground. I remains pessimistic on the market at this moment.
Similar to my analysis on Dow Jones & SGX earlier, I plotted the fibonacci lines, I noticed that white candle body broke the 50% fibonacci line. The next Fibonacci support line is 61.8% which is 2945, and the final support that I am looking at is the previous low at 2745.
I will tend to take a short position instead of long. SGX broke the 61.8% support today. It offers a good risk reward to open a short position now, however, a stop loss MUST be entered to protect our capital if we are wrong!
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
