In last week, STI gains a mere 34 points from the opening of 2821 and close higher at 2855 to mark a “ Shooting star” candlestick indicating that investors do not have faith in the recent rally. More volatility can be seen at the market as the trading volume for this week increases yet again
Friday slump in stocks created a bitter ending to a week that started with anticipation as the European leaders agreed on a nearly US$1 trillion bailout for its euro debt situation. However as the week goes along, investors began to concentrate more on details of implementation and likely hood that the EU's financial weaklings will endures years of struggle to improve their economy.
Euro fell to its lowest points since October 2008, trading below $1.24 after the announcement of new economic data that’s showed Spain Spain
Technical Analysis on STI
The situation for STI is clearly bearish though we close slightly positive for the week. In fact, we have a feeling that the long awaited correction may be coming in the next few weeks as the routine of company’s earning report ends
Important points to note
1) Shooting star candle sticks for weekly charts shown the weakness in the rally and investors are not willing to buy up.
2) The trading volume for past 3 weeks grew indicating increasing volatility and unclear in market direction ever since the headline of Euro debts comes into view.
3) RSI heading downwards though the prices went up revealed the weakness in the rally momentum.
4) STI fail to break the technical resistance at 2885 and currently using 100 days moving average for support
5) High possibility that STI will re-test the 2775 support in next week where investors will be looking carefully for further direction of the market.
Important resistance of STI: 2885
Immediate Support of STI: 2820
MAJOR Support of STI: 2775
MY tactics: Wait at sideline. May suggest profit taking in the days to come.
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