The sharp retreat on Wall Street overnight and the weak Nikkei start (down 1.3% now) are likely to spook the local bourse to a poor opening this morning.

Following a near 0.9% slip yesterday, the STI looks set to crack the lower boundary of its trading range at the 3200 psychological support today.

Meanwhile, the MACD has also initiated a sudden reversal downwards yesterday this suggests that the downside momentum is picking up strength now.

Should the bearish break materialize, the index will likely head to the next base at the 3130 minor troughs.

On the upside, we still see the 3280 recent peak as the immediate obstacle, with the subsequent hurdle pegged at the 3320 support-turned-resistance. 

Friday, August 16, 2013

STI Nearly Broke Support 3218

Message from FB group:

US lost 225 pts last night, Fed stimulus cut in concern in coming Sep 17-18 FOMC meeting.

HSI little change -1@22539, SSE-18@2081. STI -27@3220, STI seems got early signal for US drop and went ahead yesterday.
STI tested its sideway support level 3218, if it CLOSED below 3218 today, the long time consolidation could be ended with further downside expected.

Upper and Lower Shadow Candlestick

Upper and lower shadow of a candlestick also provide information that quite important about the body of a candlestick. If the body of candlestick reflects the balance position, the upper and lower shadow provide information about the action of attraction between the seller and the buyer that occurred during the period of candlestick.

The candlestick with short shadow indicates that most transactions are done at a price close to the opening and closing price.
The candlestick with long upper shadow and short lower shadow indicates that initially the action of buying dominated the transaction and bring price increasing, but then the action of selling dominate the trading so that push up the price back toward the open position.

Long White and Black Marubozu Continue ....

As we've discussed before, the existence of long white candlestick is indicate the occurrence of excess of demand that quite strong in observation period.

A long white candlestick will be more significant its impact if its emergence is accompanied by an increase of volume of transactions.

In the formulation, the emergence of long white candlesticks can be identified as follows

Long White candlestick
if candlestick body > = mlt* Average candlestick body
and
upper shadow < 1/{mlt)* Average candlestick body
and
lower shadow < 1/{mlt)* Average candlestick body
and
upper shadow < > 0
and
lower shadow < > 0
and
close price > open price

Long black candlestick
if candlestick body > = mlt* Average candlestick body
and
upper shadow < 1/{mlt)* Average candlestick body
and
lower shadow < 1/{mlt)* Average candlestick body
and
upper shadow < > 0
and
lower shadow < > 0
and
close price < open price

Long white candlestick is a candlestick with the closing price (close) larger than the opening price (open) and has a body length greater than or equal to the multiplier that multiplied with the averages of body length with upper and lower shadow is short or very short (upper / lower shadow are smaller than 1/multiplier * the averages of body length). Upper and lower shadow should have the value or not equal to zero.

Long black candlestick is a candlestick with the closing price (close) smaller than the opening price (open) and has a body length greater or equal to the multiplier that multiplied with the averages of body length with the upper and lower shadow which short or very short (upper / lower shadow are smaller than 1/multiplier * the averages of body length). Upper and lower shadow should have the value or not equal to zero.

Well, now we have been able to do identification the emergence of long black or long white candlestick pattern, now the question is whether the recommendations can be generated by a long white / black candlestick pattern?  What is thus for example the emergence of the long white candlestick than we can see an indication that the price will continue to rise in the next period?

Since the emergence of a long white candlestick is a description of the situation of excess of demand than its emergence in general will give indication the possibility of occurrence of uptrend or bullish trend any kind of that preceded, either if the emergence of the long white candlestick begins with downtrend, uptrend or sideways. The emergence of a long white candlestick, which is preceded by uptrend would be an indication of bullish trend continuation.

The emergence of a long white candlestick, which is preceded by a downtrend would be a bullish indication, while the emergence of long white candlestick which is preceded by sideways trend would be a bullish indication with special conditions, namely if the close price of the long white candlestick in question can penetrate the resistance point of the sideways trend that formed.

In general, the point of support of a long white candlestick information is at:
1. If the emergence of a long white candlestick is preceded by a uptrend or downtrend then support point will be at:
a. Close price of the long white candlestick concerned
b. The midpoint of the long white candlestick body concerned
2. If the emergence of a long white candlestick preceded by a sideways trend, then the support point will be at the limits of the level resistance of sideways trend that preceded it.

Topic for today: White and Black Marubozu

Ideally Marubozu is a candlestick with no upper shadow and lower shadow, however, there are Marubozu formations that have upper shadow without lower shadow and on the contrary, Marubozu that has only a lower shadow without upper shadow. With regard to the color of the candlestick body, there are two types of Marubozu, namely black and white Marubozu.

In candlestick analysis, Marubozu is including one candlestick indicators that quite strong its influence, either white or black Marubozu. In addition the require to not having upper and lower shadow as above, a candlestick just can be categorized as a long Marubozu if the body of candlestick in long body category (equal to the body length when we identify the existence of long white / black candlestick)

Information mirrored by Marubozu is the occurrence of movement in one direction. So it is different with other candlestick formation that reflects the action of the attractive price between buyer and seller, then in the formation of Marubozu there is no action attraction between the seller and the buyer, but only movement in one direction only.

White opening Marubozu is a Marubozu that has long white body without lower shadow but has a short or very short upper shadow. White opening Marubozu also reflects the creation of a strong positive sentiment, but still there is little selling pressure as reflected in the position of closing price slightly lower than the highest price. While white closing Marubozu is a long white candlestick without upper shadow but still has short or very short lower shadow.

Black opening Marubozu is a long black candlestick without upper shadow but still has short or very short lower shadow. While black closing Marubozu is a long black candletick with short or very short upper shadow without lower shadow.
Black Marubozu generally provide information that occurs fairly strong negative sentiment, so causing price continue to decline from opening until closing.

Thus it is clearly the highest price will be equal to the opening price and the lowest price will be equal to the closing price.

White Marubozu on the other hand, reflects the creation of quite positive sentiment so causing price continue to arise from opening to closing, so that the lowest price will be equal to the opening price while the highest price will be equal to the closing price.

Indications that produced by Marubozu formation equal to indication that generated by long candlestick, thus, the bullish or bearish indications and limitations of support and resistance that prevail in the long candlestick analysis is also applicable in the analysis of black and white Marubozu, while the difference between the long candlestick and Marubozu is lies in the strength / validity side of the information it contains, where bullish or bearish indication that generated by the Marubozu formation is stronger and better than the indication generated by long candlestick formations.

This is happen because if in the long white or black candlestick still occur the action attraction between the seller and the buyer, then in the formation Marubozu indication of attraction is not visible, or there is movement in one direction only. Thus, it is clear the information of direction of trend would be happen from Marubozu information would be more powerful than the same information generated by the formation of long candlestick pattern.

Due to the nature of Marubozu candlestick pattern equal to long candlestick, then the same too with the long candlestick analysis we must also do trend analysis that precedes the emergence of Marubozu formation of a candlestick pattern by applying the formula calculation of candlestick.

TA on BLACK or WHITE ... ...

Marubozu