STI taking a break

A lot of counters tested their November lows today again and some of the counters did not make it this time round. However, it seems to me that the STI is holding well at the support level mentioned in my previous post.

Yangzijiang seem to have broke it's strong support of $1.86. It closed at $1.85 today so it might be prudent to wait for the next closing to confirm that the support has been breached.

Yangzijiang:


China Hongxin broke the 200d MA and the trendline and that is extremely bearish. I placed a long today, only to see it breach it's support level during the day to my surprise. So in the end, i got out by taking a small loss near the closing. I believe this counter should plunge all the way down and it is a prime candidate for shorting.

China Hongxin:

A Merry X`mas indeed ?

Yesterday, i saw the Dow Jones broke the 200d MA and i tot that was ominous enough. To my surprise, STI and HSI did not plunge further but STI rallied instead. Now as i am looking at the Dow Jones, it opened on a gap up. I must say i was quite taken aback since usually Dow leads the HSI and STI and now the vice versa has happened.

STI was supported on the previous support level made in the Nov correction. Today's volume was heavier den the previous down days and that is good. That is a good chance that it may hold at this level.

Straits Times Index:


Today, a lot of counters tested their November correction level successfully. This represent a good chance to enter at a good reward to risk ratio. Nothing is absolute in any analysis so if this November correction level fails to hold, it will be time to get out to limit losses. Below are some counters which are at a strong level of support.

China Hongxin is supported on the 200d MA and a trendline that goes all the way back to March. Notice that this trendline has been tested 4 times successfully and these are signs of a valid and a strong supportive trendline.

China Hongx:


For the STX PO, the level of $2.59 has been a important level. It started off as a resistance level in July before this resistance became a support level in Sepetember and November. It tested this level successfully today. However, this is a very volatile counter as it can move up and down a lot of bids in a single trading session.

STX PO:

Recovery of the STI

As an overview, the market have seem to recover from this current correction. Both the Dow Jones and the STI showed signs of recovery as they tested their support levels.

DJIA tested the 200d MA on the last closing and managed to close above it and dat is a good sign. Although the candlestick dat is formed is a hanging man which is bearish going by candlestick charting, i think overall it is bullish because DJIA broke the 200d MA on thursday and the latest closing confirms that the DJIA is able to stay above the 200d MA. Furthemore, there is a MACD crossover and that is bullish.

Dow Jones Industrial Average:


STI showed bullishness as it gapped up for it's previous 2 openings. The volume for the last closing was very heavy and that is a good sign. Furthermore, there is a MACD crossover which was similar to the DJIA. Next resistance for the STI will be the region around the 50d and 100d EMA which happens to coincide with the 38.2% fibbonacci retracement.

Straits Times Index:


Overall, i believed that the market have bottomed out last week as they tested their previous support levels successfully. A lot of charts in my watchlist dipped to their support levels and they managed to hold their supports and some of my charts which had a double tops formation turned out to be a bull trap as they failed to follow through their formation. Last week was a good week to load and hold counters for the short term and it is time to go long.

China Hongx is now near their support level. This support is especially strong since it falls on a trendline which has been tested 3 times so far and the 200d MA. This will be a low-risk counter to load in.

China Hongx:


Yangzijiang tested the $1.86 level three times with relatively significant heavy volume and it closed above this level thus this level proves to be a strong support. Currently it is forming a triangle formation and it showed bullish divergence with the MACD and RSI technical indicators. We shall see whether these indicators work well :)

Yangzijiang: