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Wednesday, October 7, 2009

STI Updates -- Trendlines

The thing about trendlines is, there are always more than 1 set of trendlines to confuse traders. But as the saying goes, Technical Analysis is an art, not a science; there's no right or wrong to it. Thus, different traders and fund managers will have different trendlines, and their decisions will be based on the different charts that they possessed. That might sort of explain why STI get stuck at certain times like now.

Let's try to balance the bull and the bear.

A scary chart for the bulls in the log scale.



This is a chart on the log scale. In this chart, it would probably signify that the bear rally has ended.

Yet, we can also have a chart for bulls in the linear scale.


This second chart shows a possible target of 29xx as well for STI.


Then again, be it bull or bear, the risk/reward ratio isn't very high. Comparing 400 points gain v.s. an expected 1100 points loss in terms of EW count, it would be prudent not to load much of any new holdings for the long term.

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