During the week of 21 September 2020, Straits Times Index (STI) closed at 2,472.28 points. How will it fare for the week of 28 Sep?
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| Daily chart of STI, via TradingView. |
The bears overturned its losses
The bulls struggled to support the STI while fluctuating inside the key 2nd support region and the bears made full use of advantage to break below it.
On Monday and Tuesday, STI dived below its 2nd support since April.
Evidently, the bears had won during the week of 21 Sep.
It may be a false breakthrough?
As previously mentioned, I was expecting a breakthrough after a period of stagnation in STI. The bears did made a breakthrough with a breakdown in STI but could this be a false break?
The last three days, especially on Wednesday and Friday, showed a considerably strong green candlesticks - pointing to a bullish presence.
If this is really a breakthrough on the downside, the drop should be as strong as what happened in August which created a lower low. Furthermore, the bulls should not pick back up so soon.
What can happen to STI next week?
These indications are pointing to a possible pullback to retest the broken 2nd support region which is now a resistance.
No doubt, it is still a wait-and-see approach as neither sides are decisive and strong enough yet to take charge of the STI's overall movement.
