STI ETF

Commentary:

The price of STI ETF is clearly in a well-established down trend since middle of this year. In early October, it suffer a precipitous fall where price hit a low of $1.58. The huge vol registered in the sell-down and the pierceing pattern of the lowest price action day signalled a selling climax and hence a potential key reversal day. Price has since trend higher where it is currently facing resistance from the down trendline drawn.

Strategy:

Traders are encouraged to react according and watch out for significant break out point. A break below short-term support level of $1.78 might see price heading lower to test the all-time low of $1.58. Agressive traders can consider short position once $1.78 fails. However, a break above the trendline, MA5 and MA20 (~$1.90) on a closing basis could see price trending towards the fibonacci resistance level at $2 where price is likely to face stern resistance. The next resistance beyond $2 is at $2.30 where price action is deem unlikely to penetrate in the near or medium term considering the dire global economic condition. Golden rule on tight stop loss should be in placed.