23 Jul '11, 3pm
STI Has Not Been Kind To Trend Followers; Will Q3 Show The Way? – SharesInv.com
The Straits Times Index has not printed any clear trend since the beginning of the year. In fact, a symmetrical triangle pattern has appeared and we are now converging on the apex. Until the index emerges from the pattern, we are likely to see a tightening range. The action is similar to 2010. Ranging action dominated the first half, followed by a clear trend starting Q3. Will the similarity end here or will history repeat itself? View Full-sized Image Bulls and bears are in a tug of war over the index: Even as we end the week strongly, expect swings in the coming week because we have a US debt crisis looming. Technically, the STI has to overcome a significant zone on top (see blue shaded area in chart). This was a prominent turning point on many occasions since Q4 last year. Until this zone is overcome, we may not be able to encounter the high we saw earlier this year.