Thursday, October 15, 2009

Analysis of the Break out of STI and HSI !!

As you can see from the charts of 'STI break out' and 'HSI break out' I personally feel that this is the 'big move' that all of us have been waiting for.

STI Break out

HSI Break out

In addition, the duration, where they break out of the Fibonacci ratios has also increased, but this is also partly logical, because the market will tend to slow down after initial bigger movements. But do take note, if its take way too long to have the next break out, something bad might be brewing.

Last, I have also bought into an STI call warrants yesterday, when I saw the HSI the resistance line during the intra day trading. My reason for doing so is as follows:

As seen from the chart below,
  • HSI and STI are closely linked
  • They follow the Fibonacci ratios quite closely
  • Realized that either market will 'lead' the other market in breaking out of the Fibonacci lines, as shown in the red circles that I have drawn (Chart below). And this difference in time is not very long. Its like within the week itself.
  • As of yesterday's intra-day trading, Hang Seng broke the resistance quite easily, while STI struggles to go past 2700. However because of this 'HSI following STI or STI following HSI when breaking out' that I assumed. I bought the STI warrants.

As for now, like I said in one of my recent post a feel weeks back, it is still safer to blindly go long now, then trying to time a short!

*Just an opinion of mine