Wednesday, August 11, 2010

STI: Double Top?

The much afraid head and shoulders chart pattern was invalidated at the STI chart.  Good grief!  Just when you feel relieved, another dark cloud is forming on the STI chart.  Instead of the most bearish head & shoulders, another bearish chart pattern - double top, is slowly charting its way. 

STI first hit a high of 3037 on 15 April, 2010, then it hit again a high of 3043 on 3 Aug 2010.  In between, STI went to a low of 2648 on 25 May, 2010.  The 15 Apr & 3 Aug highs form the two tops, and now STI has turned down, and moving down.  It STI doesn't bounce back when it hits 2648, the 25 May low, then we are facing with the bearish double top. 

Would STI go this way?  Nobody knows for sure, but there is always a possibility.  Another possibility is STI will hit the 2648 low and then bounce back.  In that case, we will be in a side-way market, which is more neutral. 

Let's wait and see how STI develops in the next month or two.  It is going to be very interesting.  In addition, somebody mentioned Singapore's Q3 GDP growth may turn negative to something like -12%, and then Q4 will be +2%. 

Happy investing!

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