During the week of 31 August 2020, Straits Times Index (STI) closed at 2,509.64 points. How will it fare for the week of 7 September?
 |
| Picture: Daily chart of STI, via TradingView. |
Tug-of-war between bulls and bears
In my previous STI analysis article (31 August), I mentioned that the bears might make an attempt to break the 2nd support region.
The bulls and bears were fighting off each other with no major movement seen in the chart.
Bearish breakdown as breakthrough
This lasted until Friday, when STI gapped down by opening at the low-end of the 2nd support region. Unsurprising, the bears had won during the week of 31 August.
However, Friday's candlestick showed slight bullish movement attempting to make a rebound from the 2nd support region. This was likely due to a temporary oversold condition after a sharp fall between Thursday close and Friday's opening.
In the end, STI is still being supported at the region. As mentioned before, this support region is very strong with its proven capability to prevent it from breaking down since April.
What can happen to STI next week?
With that, I am still going to be emphasising the importance of the 2nd support region - for any potential price action coming out from there.
The bulls may look to make a short bullish attempt early next week, which I am not that optimistic about based on how bearish the STI has been since June.
Should the 2nd support region breaks, we should see more bearish movement towards the 3rd support region.
