Picture 1: STI InvestingNote chart, before the year 2018 arrived.
What is it now?
As of 19 January 2018, STI closed at 3,550.36 points. This is an increment of about 145 points over 14 trading days. This tell us one thing - price must have followed the blue arrow and went back into the rising wedge. What has actually happened brought me an even greater astonishment.
Picture 2: STI InvestingNote chart, as of 19 January 2018.
STI has managed to return into the rising wedge and close above the upper trend line of the wedge. It went back to retest the upper trend line and last Friday, 19 January 2018, has confirmed the strong support from the trend line. In fact, those two long red and green candles formed a candlestick pattern known as a piercing pattern.
What is that black horizontal line in picture 2?
That wasn't supposed to be 3,549.77 - it was meant to be 3,549.85 in exact points. Why 3,549.85? Picture 3 will tell you why.
Picture 3: Monthly InvestingNote chart of STI.
3,549.85 was the previous peak back in April 2015. This was why STI stopped rising and returned downward to retest the upper trend line of the wedge.
What might happen to STI in the future?
On 18 January 2018, we don't know whether the drop will bring the price back into the rising wedge once again. This was an uncertainty. On 19 January 2018, the huge gain has told us that the support is extremely strong and firm and that there is still bullishness going on. Furthermore, notice that STI has managed to close at 3,550.36. This close is above the previous peak of 3,549.85. My opinion is therefore that, Singapore market will continue to be bullish towards the all-time high of 3,906.16 points over the next few months.
Picture 4: Monthly InvestingNote chart of STI, depicting my projection.
This is a huge right-angled broadening & ascending triangle in this monthly chart. A breakout from the pattern would suggest a movement towards 4,500 points. Yes, 4,500 points. This breakout also coincides with price moving towards the next resistance, which is the all-time high of 3,906.16 points. From there, there might be a stall in bullishness with the retest of the upper triangular trend line before resuming towards the psychological level, 4,000 points.
Why do I think that STI will break 4,000 after reaching the all-time high? If you recall how the Dow Jones moved last year, it was near 20,000 points but shy of a few hundred points at that time. But 20,000 surely looks better that 19,999 points, no? It was the huge excitement, jubilation, exhilaration of the crowd, whatever you call it, that brought in enthusiastic demand regardless of whether it is oversold or not. Everyone were eager to witness the 20,000 of the Dow Jones. Eventually, when it broke that twenty grand, everyone celebrated that event with news pouring over everywhere throughout the world. This is the psychology of the crowd.
However, where will STI eventually stop climbing and start diving towards a major crash, still lies in uncertainty..
This is a huge right-angled broadening & ascending triangle in this monthly chart. A breakout from the pattern would suggest a movement towards 4,500 points. Yes, 4,500 points. This breakout also coincides with price moving towards the next resistance, which is the all-time high of 3,906.16 points. From there, there might be a stall in bullishness with the retest of the upper triangular trend line before resuming towards the psychological level, 4,000 points.
Why do I think that STI will break 4,000 after reaching the all-time high? If you recall how the Dow Jones moved last year, it was near 20,000 points but shy of a few hundred points at that time. But 20,000 surely looks better that 19,999 points, no? It was the huge excitement, jubilation, exhilaration of the crowd, whatever you call it, that brought in enthusiastic demand regardless of whether it is oversold or not. Everyone were eager to witness the 20,000 of the Dow Jones. Eventually, when it broke that twenty grand, everyone celebrated that event with news pouring over everywhere throughout the world. This is the psychology of the crowd.
However, where will STI eventually stop climbing and start diving towards a major crash, still lies in uncertainty..
