Straits Times Index

This is an update on the STI. In previous posts, I found head and shoulders patterns on the chart of the STI. In the chart below, you will see another one that I have just identified. The biggest pattern I see on the STI is a head and shoulders pattern that has been confirmed with an upward breakout. This pattern dates back to October of 2010. Lately, the small run in stock markets has taken the STI out of the head and shoulders pattern that I see. Thus, I will be looking for the STI to perform a head test. When a counter or index breaks to the upside from a head and shoulders pattern, I will be looking for price to go up to the “head”. In the STI’s case, I will be looking for it to head to 3300 region. 

On the chart, you will see 3 head and shoulders patterns. Right now the one “in play” is the largest one highlighted in black rectangles. As you can see, the STI posted white candles to break up out of the head and shoulders. If we do go into some consolidation in the next several trading days, then I will be looking for the STI to hit 3300 territory by the end of the month. If not, I see no reason why the STI would not go up there. Take a look at the smaller head and shoulders pattern that is coloured with purple. That one was an upright head and shoulders as well, and it had an upward breakout too.

So this is all for tonight, let us see if the beginning-of-the-year buying pressure does materialise in the weeks ahead to send the STI up to 3300.

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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