Market Technician

Straits Times Index (STI) Update: SHORT TERM PULLBACK   Technical Observation: The Index touched 3,055 zone which we discussed on our last posting and reversed during today's trading session. Where is STI trading from here? My Bias for STI is to pullback from here towards 2,980-3,000 zone with a corrective a-b-c corrective sequence after completing the 5-wave impulse sequence started 27 Dec 2016. Alternative direction will see STI moves sideway within 3,000–3,060 zone. STI continues to trade in a upward momentum in view we did not experience any violations of the uptrend channel and MACD continues to trade above zero. Personal view, current correction will provide investors to add leading stocks for mid-term holding or Swing Trade opportunities. Sectors to consider are Real Estate and Financial Sectors. The specific stocks were shared in my Weekly Outlook this morning.

Shanghai Stock Exchange Composite Index (SSE) Update: Rebound Expected towards 3,200 Technical Observation: The Index is currently trading on a primary upward trend with secondary trend correcting towards current 3,100 level. As the index touches the lower uptrend line, we observed buyers halting the pullback and is especially obvious with recent Long-legged Doji appearing. With this, we have technical reasons to believe that the index will be reverting back to its primary uptrend. Traders can consider UETF SSE50China (JK8) listed on SGX for exposure in this bullish SSE setup. Forecast (My View): 1st Target Price at 3,200 level (61.80% retracement level) 2nd Target Price at 3,300 level (100% retracement level)

Straits Times Index (STI) Update   The Index continues its rally since coming into 2017, with intraday high at 2,986. However, a closer look shows some signs of exhaustion.  Technical Observation: STI will likely to trade in a sideway momentum in the up coming 2 weeks, in view of the positive price action with light volume trading. The forecast sideway trading action also coincides with the eventful January calendar ranging from earnings announcement, economic data to important US speeches. Thus, traders or investors can consider profit taking near 2,980–3,000 zone and accumulate near 2,900–2,920 zone. Alternative direction will see STI moves towards 3,050–3,060 zone on light trading volume.

Straits Times Index (STI) Revisit Following is a re-cap on our forecast for STI Index on 19 Dec 2016 A review today shows STI Index traded in similar fashion in accordance with our forecast, bouncing off the support level at Fibonacci 61.8% Golden Mean coupled with a confluence of 2 supports touching recent resistance as per chart. This is an example on the simple practical forecasting using Fibonacci Levels. Out of the universe of technical tools, Fibonacci Levels and Elliot Wave Theory remains the essential tools for analysts and traders to conduct forecasting.