Blue-chips in Trouble

Evening all,

I have some words on the local market for today. After a fall starting in September, the STI has regained lost ground, and closed at 3350 on Friday. Two periods of rejection at this region in recent history mean that the STI is testing resistance now. When I look specifically at charts of the component stocks, I see more bearish-looking charts than bullish ones; and this was what I thought a few months back too - which makes me wonder how the STI managed to follow international indices higher. I want to share a few counters that have confirmed their mid-term sluggishness.

This is SIA Engineering - S59.SI. In my last post on this counter - http://technicalanalysistalk.wordpress.com/2014/04/10/sia-engg-cruising-at-all-time-high/ - I mentioned my disappointment at SIA Engg failing at an all-time high, and prompted the chance of a downtrend emerging from a consolidation. SIA Engg traded in quite a volatile fashion from August to November before a decisive break down from the range (in black) in the middle of November. The sell-off put SIA Engg 10% below levels seen a few months back. Significantly, SIA Engg is now in a clear downtrend.

Next, SembCorp Marine - S51.SI. In my last post on SembMar - http://technicalanalysistalk.wordpress.com/2014/02/18/sembmarine-looking-bearish/ - I identified a huge descending triangle. True to theory, SembMar continued downwards. Based on the height of the pattern, SembMar is reaching its target. Incidentally, the downward target from the triangle is where a major low is: $3.10 region.

Finally, ST Engg - S63.SI.

After coming out of a triangle in November of last year, ST Engg went range-bound for almost a year. In August of this year, ST Engg started sliding even lower. A sudden spike sent ST Engg to the 200-day MA but rejection kept the general downtrend intact. The recent sell-off is with heavy volume. The picture looks quite similar to SembMar's. I see downtrends confirmed in these and other counters.

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This entry was written by , posted on November 30, 2014 at 8:54 PM, filed under Singapore market and tagged descending triangle, S51.SI, S59.SI, S63.SI, SembMar, Sembmarine, SIA Engg, ST Engg, symmetrical triangle. Bookmark the permalink. Follow any comments here with the RSS feed for this post. or leave a trackback: Trackback URL.