Market Technician

A review of our Gold forecast. We forecast a short term bearish view on Gold futures. Price hit a low of USD1,267.90 and reached our target price zone of USD1,265-1,270 before rebounding. Price traded as planned.  One thing to learn here. Fibonacci tool is a very useful tool in forecasting target price. On the above Gold trade, coupled with the demand and supply actions before the breakdown, it gave us clues that the selling would be somewhat weak. Thus, with the above, we set a near-term target at 1.618. Fibonacci tool is one of the forecasting methods we used in our Richard Wyckoff Method class. By combining demand and supply analysis with Fibonacci application , setting target prices helps traders to be in harmony with markets.

KLCI Analysis - Short-Term Downward Trendline Broken - MACD Momentum Change (to bullish) - Expected to retest key downward trend line - Oil (Brent) which index has a good degree of correlation is trading up, index potentially follow-suit Join Us  at our next Effective Technical Analysis class jointly organised by SGX to learn how to apply trendline effectively. Disclaimer Applies.

Trade Review: Wells Fargo (WFC) Stock traded as forecast from US$49.82 to low of US$45.66 (+8.35%). Despite an excess during the trade duration, stock traded towards our target price. But what we learn from this trade is that stocks has a bearish tendency if it's relative strength (RS) is weaker than market (Yellow Line = S&P500). Thus, if we are identifying stocks to trade on the long side, selecting a stock with positive RS will be one of the important criteria.

Gold is expected to trade lower towards 1st target zone of 1,265-1,270 after breaking down below its distribution support line (fall thru the Ice) with MACD experiencing weakness. Weakness in gold may means market is expected to take on more risk. Equities may potentially see further strength. 

Singtel (Z74) Singtel has been on Mark Down since July 2017 and frequently used as a downtrend example during my Technical Analysis workshops or seminar. However, five trading days ago, Singtel broke out from its multi months downtrend line declassifying itself as a marking down (downtrend) stock. Its bullish for a weak stock to exit its downtrend especially with all the negative news surrounding it such as downgrades and outlook cut by rating agencies, S&P and Moody's. We have a bullish bias on Singtel with 1st TP at S$3.20 and 2nd TP at S$3.37. We alerted our community this morning at S$3.11, currently Singtel is trading at S$3.17. 

US-China Trade Talk 1Q19 Earnings Reporting Season Oil Price (Brent) above US$70/bbl US Non-farm Payroll Edged Up Brexit Deal Delay What will we be expecting from SG market with the macro developments? And our long-term cycle indicator is suggesting we are in still in a bullish environment.  One thing for sure, we will be watching closely on the bullish/bearish character to determine if we are seeing a continuation or reversal at the critical 3,350 level. We will update on this blog again once market has shown its character. And yes, you would have guess it, such characters is created by smart money.

Above was shared in our Wyckoff telegram community earlier, alerting the community to keep watch on trading opportunities in the Agriculture sector.  Market rallied this week. However, one sector stood out, yes, the Agriculture sector (Wilmar, Golden Agri, First Resources and Indofood Agri). Second step of our structured 3-steps approach  ( Identify Sector & Stock with Strong/Weak Relative Strength) , we learn to identify trades in sectors that are moving and trade inline its direction, giving us a higher trading probability. From the Agri stock's breakout, we have a strong conviction that the sector is seeing increasing demand (Demand>Supply=Mark Up or Trend Up) .  What's the fundemental reason? It will always revealed to us weeks or months later.  However, in the meantime, we will be swing trading in the sector till the fundamental reason is revealed. Learn to trade in a structured process, inline with market and smart money, continue...

On 11 Feb 19, we applied the Wyckoff Method and forecast that bitcoin (BTC) has entered into an accumulation zone (bottomed) and is expecting a breakout. We got the breakout today with BTC reaching a high of $5,106.  With the strong breakout, we expect BTC to range or pullback amid profit taking. It will also be an opportunity BTC to test its support (and the rest who has not entered to hop on).  BTC is currently trading in Mark Up phase , we will expect BTC to retest its $5,000 high and if successfully broken, next target would be $5,800. Learning to recognise demand/supply balance and identify different phases of price cycle allow us to capture opportunity and reduce risk in our market operations. Continue following our blog to learn more about Wyckoff Method and identifying various phases of price cycle.

Above Chip Eng Seng chart was shared by one of our senior members of the Wyckoff telegram community. The broke out from range is expected to follow thru with further upside as our Relative Strength (RS) indicator  showing that the stock is outperforming the market and strong fund flow  (FFI) coming in on breakout day. Strong RS and FFI indicators provide traders with a high confidence that we trading alongside smart money. Continue to following our blog for further updates on Chip Eng Seng.