Weekend review of DJIA and STI

Since my last post, there has been a short term rebound as mentioned in my last post from the point of technical analysis and there has been new development. What can we expect from the chart at this point of time ?

For the Dow Jones, it is now forming a triangle formation and this shows even strength between the bulls and the bears since the DJIA has been forming a lower high and a higher low. It will be prudent to see which side of the triangle it breaks out from. If it breaks from the downside, a new downtrend will begin and vice versa. The next support level will be around 11620.

Dow Jones Industrial Average:


Onto the Straits Times Index, the previous gaps down has been negated or covered back in the last few days. This is due to the bullish sentiment for the budget day thus for that few days before budget day, STI's movement is diverging from the DJIA. Now that the budget is out, the movement of STI is likely to converge back with the DJIA with the DJIA taking the lead. The next resistance level to watch out for will be around 3150 . There are also other resistances such as the resistive trendline which has been tested thrice and the 50d EMA.

Straits Times Index:


Sembcorp caught my attention since it is now at a pivotal point. The prior support level of $4.87 has now become a resistance level which has been tested successfully once so far and now it is near this level. At this level, it formed a hanging man candlestick which is bearish by nature. However, there is also bullish divergence in the A/D line and the RSI so it is conflicting in this sense. Whether it can break out from this resistance or bounce off this will probably depend on movement of the indices.

Sembcorp: