Straits Times Index Outlook - Wyckoff Price Cycle Analysis

Straits Times Index - FTSE STI

Singapore has one of the most open economy in the world with significant exposure to Supply Chain. Our Trade-to-GDP Ratio is 322% in 2017 as indicated by World Bank. Trade Tension will have direct impact on our economy if trade volume were to drop off. 　

Such data and event probability forecast would have already been computed and with actions taken by hedge funds or people familiar with global trades.　

What about private traders like us??　

Nope, we do not necessary need to lose out, as long as we trade alongside with them.　

Having knowledge of the Wyckoff price cycle and its characteristics help traders recognise the actions of these smart money and trade in-line with their plans.　

In our case of Straits Times Index (STI), by applying Wyckoff analysis, we expect the index to trade towards 1st objective of 3,100 and 2nd objective 2,960.　

With the above, private traders could take short trades alongside smart money or avoid trading on the long side, going against the flow.　

Quote from Richard D. Wyckoff:　

"These are the Rules of the Game.."

Cheers.　

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.

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

Keppel DC REIT (AJBU): Expect price to trade towards S$2.00

Keppel DC REIT (AJBU) Expect price to trade towards S$2.00 We have observed a decrease in technical supply at the S$1.80 support area during recent trading sessions. Furthermore, a softer interest rate outlook could be advantageous for the Data Centre operator. Consequently, we anticipate the REIT to move towards our initial target of S$2.00, with the potential to reach S$2.20 if it breaks through resistance. Our stop level is set below S$1.72. Disclaimers Apply

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