Straits Times Index – Daily timeframe (Update from 20 February 2018)
Current Sentiment: Bearish
Support 1: 3275 Resistance 1: 3469
Support 2: 3195 Resistance 2: 3550
As news of China planning to impose reciprocal Tariffs on $50 Billion of US goods surfaced, the general equity market went into full scale risk-off mode. As a result, the ongoing selloff in Straits Times Index (STI) accelerated as it closed with a whopping -2.12% on 04/04/18.
With the sharp selloff on 04/04/18, the STI has closed below the 200-day moving average signalling some weakness.
More importantly, the STI is currently hovering at the last line of defence at the 3354 – 3341 support area. Note the 3354 – 3341 support area has kept the uptrend intact since October 2017 and had successfully reversed the selloff on two occasions shown by the yellow highlighted boxes.
From a price action perspective, the 3354 – 3341 support area needs to hold for the long-term uptrend to stay intact.
On the other hand, if the selloff continues and breaks below the 3354 – 3341 support area, a deeper correction might happen with sellers targeting the 3275 support area followed by 3195. The long-term uptrend will then shift into an immediate downtrend after the STI closes below the 3354 – 3341 support area.
Watch the 3354 – 3341 dividing closely.
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