Straits Times Index – Daily timeframe (Update from 6 September 2018)
*Entry Price: 3142 Stop loss: 3020 Take profit: 3263
Current Sentiment: Bullish
Support 1: 3100 Resistance 1: 3189
Support 2: 3000 Resistance 2: 3263
The Straits Times Index fell as expected after the last update with an accelerating bearish momentum. Nonetheless, the psychological support area at 3100 area seemed to be halting the selloff currently. Since testing the 3100 psychological support area on 10/09/18, the bulls have managed to keep that level intact. Moreover, the bullish rejection off the 3100 psychological support area on 12/09/18 succeeded in forming a Bullish Engulfing Bar signal some sign of strength.
Keep in mind the recent selling from the past two months have also dragged the Relative Strength Index (RSI) into the oversold condition suggests an imminent mean reversion. The RSI hit a low of 27 on 11/08/19. RSI measures momentum. A reading above 70 represents overbought condition while a reading below 30 represents oversold condition. Thus, with the current Bullish Engulfing Bar rejection off the 3100 psychological support area, the RSI has also risen back above the 30 oversold region suggests the start of the mean reversion higher.
Expect price to rebound higher next if the bullish follow through happens for price to test the 3189 resistance area followed by 3263.