Apologies for the lack of updates in the past couple of weeks. Since the last Watchlist update on 6 May, the STI has followed trended downwards in tandem global markets. Let’s take a snapshot view of the state of the STI-30 stocks (taken intraday 1230hrs on 28 May 2012, so closing prices may be different):

Not a pretty sight if you’re currently holding long positions. None of the STI30 are giving any buy signals on Weekly EMA 2/5, although GLP is starting to show some signs of coming back to life. The other worrying trend here is that almost all of the STI30 are below their 200-day MA, which suggests that the STI market is firmly in bear territory.

The ADX readings are all on the high side (above 30), which suggests that bearish momentum is strong, with stocks like Wilmar and Golden Agri reaching as high as 40+. Has the market bottomed?

The first clue to look for is the ADX reading to reach a peak and reverse course to drop back towards 30, which signals a weakening of the bearish momentum. Once the ADX drops below 30, look out for reversal of momentum to the upside by monitoring for the weekly EMA 2/5 cross to be supported by an increase in ADX reading back above 30.

Click here for the perma-link to the STI30 stocks analysis table. 

Can you find any stocks out there due for reversal?