As mentioned by my previous Straits Times Index (STI) article for the week of 7 November 2020, I predicted that STI would start to experience a correction by breaching below the 3rd resistance.
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| Picture: Daily chart of STI, via TradingView. |
Formidable bullish movement still
However, it was wrong on my part. The STI, after consolidating, continued its way upward with a strong breakout towards the psychological 3,000 level.
The prediction of a breach below the 3rd resistance did not happen, and now became the 2nd support in the chart above.
Bulls are weakening - for now
However, based on the chart, the STI starts to decelerate on its bullish strength after a breakout. This is to show that buyers have been taking off their purchases at the psychological level.
What can happen as we move forward?
With that, I would expect STI to have a correction temporarily over the next few days, in an attempt to retest the 2,920 region first.
If you notice, this is also the high of the consolidated triangle between 2,800 to 2,900 region.
