Evening all,
I have SIA Engg, S59.SI for today. Ever since besting all-time highs two years ago, SIA Engg entered into a distribution phase and traded in a fairly wide range between $4.60 and the $5.00 region. A clear support zone formed just above the previous major post-crash peak. In my last post on SIA Engg, http://technicalanalysistalk.wordpress.com/2013/05/02/singapore-market-moving-up-sia-engg-impresses/, I trusted the strong uptrend at that time. But as time unfolded, SIA Engg sold off quite severely – 10% off the peak. Fortunately, I was not in a position.
Now, I shall zoom in on the rangebound market – since this is the current state of the market for S59.SI’s shares. I highlight a number of events inside this flat phase. First, you can see the failed attempt at holding the all-time high surge; then, there is a large symmetrical triangle – although not the best-looking, a clear enough zig-zag price action coupled with ideal volume behavior confirms the pattern; finally, a bear flag portraying the breakout towards the downside of the symmetrical triangle. What seems like a boring flat market is putting SIA Engg on the radar.
One thing to note is that the flag pole of the bear flag is not exactly ideal: there is a gap in it. Also, the flag of the flag pole seems more like the market filling up the gap casually. As a longer-term player nowadays, I will still take the flat market as it is. But in a few months’ time, if SIA Engg is clearly broken down from this range, I just might look at it seriously for a bearish set-up.
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