Wednesday, March 25, 2009

SGX - More Near-term Downside

- After falling out of its 4-month uptrend channel to a new 2.5-year low, SGX has managed to stage a decent rebound.

- However, the rebound appears to be waning as it approaches what seems to be a very tough resistance at S$4.90, provided by a combination of the lower channel line, the 50-day MA, the 100-day MA and the upper Bollinger band.

- Although the MACD indicator remains slightly bullish, the other technical indicators have turned slightly negative; the stochastic indicator has cut down just inside the overbought region, and similar moves in the past saw subsequent price declines.

- Meanwhile, the OBV indicator’s 5.5-month downtrend pattern remains intact and the RSI indicator has shown a tendency to cut back down just above the centre line.

- As such, we see a possible pullback to the immediate support around $4.31 (Nov ’08 low), but should hold above $4.00 (2009 low).

- And should the S$4.90 cap give way, the next resistance is at $5.85 (2009 high)

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