How far lower for SIA?

Evening traders/investors,

I have a chart of SIA, C6L.SI, for today.

After recovering well from the 2008/2009 crash, SIA rounded at the $14.00 region and has been trending downwards. Using fibonacci retracements studies – taking the high at $14.80 and the low at $8.00 – I am seeing the important levels working as should be. Now, SIA is flirting around the 61.8% retracement level. When looking at the chart with mid- to long-term view in mind, breaking below the 50% level is usually a very negative event. The 50% level is not a fibonacci number actually, but some chartists use it for the psychological edge it brings to a chart. For me, I use it too as it works just as well as the fibonacci numbers. Anyways, note that the 61.8% level is right where SIA is at now, and the next level below comes in at $9.50.

Zooming in, you will see that SIA has been consolidating in the range of $10.20 – $11.40. One reason why SIA is finding support here is because back in the early months of 2009, SIA’s consolidation bottom found resistance at the $9.70 region. Resistance in the past is acting as support for now. While there is still quite some way down to $9.70, we are very near there. Next, we look for chart patterns. The mid-term downtrend SIA is in has brought about a nice looking downward parallel channel. As of today’s close, SIA is edging towards the top of the channel. Technically, we look for selling to come in and push SIA’s price down. The channel’s top resistance trendline finds strength from the 200-day MA. What I deduce from all these events on SIA’s price chart is that in general, I should be looking for continued downside. However, we seem to have found some support based on recent price action. At the same time, a consolidation base in the past is supporting this support region. So, SIA may have found a mid-term bottom base – which suggests good opportunities to build a long position.

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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