Friday, November 13, 2009

STI Candlestick: Dark Cloud Cover

According to Candlesticker.com
If the black real body’s close penetrates deeper into the prior white real body, the chance for a top increases. There are some Japanese technicians who require more than a 50% penetration of the black day’s close into the white real body. If the black candlestick does not close below the halfway point of the white candlestick then it is better to wait for confirmation following the dark cloud cover; and even if it does, a confirmation may still be necessary. This confirmation may be in the form of a black candlestick, a large gap down or a lower close on the next trading day.

Notice that the dark cloud cover did closed more than 50% into the white body, signifying a potential reversal.

Coupled this with
1) Elliott waves showing that a major top is near
2) MFI has not broken new highs, signifying negative divergence
3) high CCI
4) Nearing the top of the bollinger band
5) Nearing the big bear line at 2755

Also, 2745 was a support tested twice on 22nd Jan 2008 and 17 Mar 2008 before it was finally broken through. It's possibly a strong resistance.

Finally, between 18th Aug 2008 and 2nd Sep 2008, there's an unfilled gap between 2763.42 and 2773.05, which could be the next resistance if 2745 and 2755 are broken through. Will STI want to rise to cover this gap before the down?

With so many potential stops ahead, it's hard to see how STI can push much further. If we want the rally to continue, STI had better be green tomorrow to break the dark clouds.


  1. followed by a bullish counterattack hmm... Stubborn bulls :)

  2. Indeed :)

    The strength is making me even more skeptical of myself... But I shall stick to my counts at the moment.


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