Saturday, July 3, 2010

STI Update

With the recent fall of STI (Straits Times Index), STI might be in the last leg on the formation of the super bearish head and shoulders chart pattern.  At this moment, we still can't confirm the head & shoulders pattern, as we still have to wait and see whether STI will drop to 2647 points, and how STI behaves after that. 

If STI drops below 2647, then the head & shoulders chart pattern is confirmed and we should expect a very bearish bias to STI's further movements.  Investors should put on their best armour to protect themselves from the potential onslaught on share prices. 

If STI drops to 2647 points and then bounces back, then the head & shoulders chart pattern will be invalidated.  It might develop into a side-way pattern, with STI bouncing between support and resistance.  This will be good news to everybody.

If we take March 2009 low to April 2010 high as 100% and draw the Fibonacci retracement lines, we will notice 2645 points thereabout is the 23.6% retracement, after that, 2434 is the 38.2% retracement and 2247 is the 50% retracement. 

Right now is the uncertain period of STI.  The bold investors may buy into opportunities when STI approaches their key levels with proper risk control. 

Happy investing.

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