STI : End of Elliott Wave 5. Big correction is coming?

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I am very tempted to pick up some stocks this week after seeing some selling off. However, I changed my mind and decided to ENDURE and wait for the big correction. I have to be very disciplined for these two months.

STI had completed the Elliott Wave 5 and started the correction. The next support will be probably around 2420 points (61.8% Fibonacci retracement of Wave 5).

The index will probably retrace back to 2220 points (61.8% retracement of full Elliot Wave 1- 5), ie. there is another 300 points to go! STI is really looking bearish, isn’t it? However, it is a good news for those who have missed the April-July rally. I am loaded, and I am ready to go!

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Capitaland DOUBLE TOPS formation – Down Trend started?

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A double tops had been formed on Capitaland indicating the trend reversal. In addition, all Standard Six Indicators are showing bearish convergence. Capitaland closed at $3.63 today with hanging man candle. Stock price broke the 20D & 50D MA support and at the lower end of Bollinger Band. MACD is very close entering bearish convergance at lower half, RSI & Stochastic are showing bearish convergence as well. All technical indicators showed that down trend is going to start. I am sitting back, relax and wait for the big correction before I long this stock. I hope I am right!

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Watch out for the volume change!

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I get caught in a few occasions that my predictation using technical indicators went haywire when there were sudden drop trading volume. On Aug 6, everything looked good on this chart. The stock price breakout from consolidation and broke the resistance of $0.13 with 63.5M shares traded. The stock price was above 20D, 50D and 200D MA, at the upper Bollinger Band, on top of the Parabolic SAR, MACD confirmed bullish convergence, RSI & Stochastic were bullish. All Standard Six indicators showed bullish convergence and looked really good to enter the position. The next day the volume dropped to 14.2M shares and end up with a bearish marubozu candle. For the subsequent days, the volume getting lower and lower and out of the sudden the stock was losing momentum. Now I have to hold on this stock as a longer term investment.

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