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STI: Falling through the 200dMA.

Thursday, May 20, 2010

My last post on the STI scared quite a few people, I imagine. Well, the STI has closed below the 200dMA on relatively high volume.  Failing to recapture the 200dMA support is bearish, of course.




The MACD continues to pull away downwards from the signal line, increasing the distance with the signal line when it looked as if it was just closing the distance in the last few sessions. The sell signal in the last session was confirmed.

The MFI continues forming lower highs and being some distance from oversold, it could continue moving downwards with little trouble.  The OBV is steadily declining. The 20dMA seems set to form a dead cross with the 100dMA in due course.



The low achieved today at 2,735 just touched the uptrend line before bouncing to close somewhat higher at 2,753.  Will the trendline support hold up tomorrow?

Looking at the weekly chart, we find the next support provided by the 50wMA at 2,720 points. The previous low was at 2,660 points. To keep a semblance of an uptrend, the next low formed by the STI should be higher than 2,660 points. Well, there is one day left to the week.  How the STI behaves tomorrow could very well determine the tone of the market next week.



Incidentally, the declining 100wMA is no longer at 2,425 points.  It is now at 2,400 points. A declining MA is not a very strong support.  That's for sure.

Related post:
STI at 2425 points?

4 comments:

Anonymous said...

hi AK71,

I have been following your blog for quite some time now and will like to know what's your current strategy in this current "correction"?

Is it better to offload all the shares and sit on the sidelines with cash and wait for opportunity to enter again?

Or is it better to keep shares and buy more using averaging method?

Thanks

AK71 said...

Hi Anonymous,

I will be posting about what I think later today. :)

Could you leave your name or initials for future comments? Thanks. :)

NewbieSg said...

Hi AK71,

thanks,i have read your updated post.

AK71 said...

Hi NewbieSg,

You are welcomed. Good luck. :)

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