During the week of 5 October 2020, the Straits Times Index closed at 2,532.96 points. How will it fare next week for the week of 12 October 2020?
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| Picture: Daily chart of STI, via TradingView. |
The bulls broke the broken 2nd support region
Last week, the bulls managed to make use of the consolidated falling wedge pattern to make a bullish move. It breached the old 2nd support region and stayed above there.
This breakthrough came after two advancements to pullback towards its broken 2nd support region for a retest.
Evidently, the bulls had won during the week of 5 October.
Breakout is not strong
Yes, this bullish breakout is considered a breakthrough. I was expecting the breakout to be sharp but it turned out not as strong as it was supposed to like the bullish movements in April and June.
Furthermore, last Friday was a full red marubozu candlestick. The bears throughout the entire session and it was pretty prominent.
What can happen to the STI next week?
With that, the bears may attempt to initiate a throwback towards the 2nd support region once again. This time, it may be to retest the demand side at the 2nd support region.
Should the demand be able to withstand the bearish throwback, the 1st resistance can be the next target moving forward.
Therefore, this 2nd support region will still be a critical area to look out for any price action.
