Skip to main content

Wyckoff's Law of Effort

Law of Effort
Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result.

However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying.

Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.





Tags

Most Popular

DBS Group Holdings (D05): Upward Move Expectations

  DBS Group Holdings (D05) Upward Move Expectations Technically, price trading above 36.58, could see DBS Group retest  previous high of 38.55. Both Relative Strength and momentum indicator FFI are supportive of the move. Stop below 35.42 Disclaimers apply
Read more

BYD Co (1211:HK) Witnessing Signs of Strength

BYD Co (1211:HK) Witnessing Signs of Strength On Friday, we observed strong buying within a wide trading range, with the stock closing near the day’s high and good volume recorded. The previous two days of selling showed relatively low volume, indicating potential supply exhaustion. The stock price is currently at a key resistance level, constrained by a downward trendline and a horizontal support-turned-resistance line. A breakout above this level could signal a potential trend reversal , with an initial technical price target of HK$300.00. The stock is outperforming the broader market, indicating strong market demand, as evidenced by our proprietary Relative Strength Indicator (RSI), which is above zero. Additionally, the volume momentum indicator (FFI) is improving, further supporting the possibility of supply exhaustion. The Stochastic indicator also continues to trend higher, reinforcing a bullish outlook. A stop-loss price is set below HK$248.40 . If the price falls below this l...
Read more

Week Ahead: Trump Trade and the Resilient US Economy

  Week Ahead, 9 Dec 2024 Macro News: U.S. markets continued their record-breaking streak this week following a reassuring speech by U.S. Federal Reserve Chair Jerome Powell, highlighting Fed's cautious yet comfortable stance on rate cuts. Beneficiaries of the "Trump Trade" also saw significant gains, with Tesla Inc. rising by +12.77% and Bitcoin up +2.24% for the week. The U.S. technology sector, represented by the QQQ ETF, also performed strongly, boosted by Friday's jobs report, which indicated a resilient economy. Meanwhile, the Hang Seng Index (2800 ETF) experienced a technical turnaround, gaining +2.28% this week. The rally was fuelled by speculation that Beijing might introduce additional lending and mortgage rate cuts to stimulate the economy. Medium Term: • S&P 500 (SPX): Index remains above the 6,000 level and could trend towards the 6,180 zone. • Straits Times Index (STI): STI reversed near our 3,860 resistance zone. We are neutral and is looking out for...
Read more