The first half of 2017 has been a good run for the Singapore stock market - Straits Times Index (STI), gaining over 300 points.
However, we believe that a retracement or a reversal to the downside is imminent. The question is are we gonna see a retracement or a reversal?
Retracement
Price moves correctively, usually taking a longer period of time, and does not move much in terms of price.
Reversal
Price moves impulsively, usually taking a shorter period of time, and moves strongly in terms of price.
Knowing what constitute a retracement and a reversal is essential in knowing how to plan your trades.
1) If we see a correctively move lower towards 3077 area, it will present us a good opportunity to look for one more move to the upside towards 3360 area.
2) If we see an impulsively move lower breaking the trend line, we can expect price to move lower potentially towards 2901 area. If this happens, it will present us a good selling opportunity targeting 2901.
Based on our Elliott Wave analysis, with the current price development, we are expecting the 1st scenario to have a higher probability of happening.
Even if you are not trading the stock index, understanding and monitoring the equities market can provide us with the current market risk environment, and thus provide us with trading opportunities in the currency market too.
However, we believe that a retracement or a reversal to the downside is imminent. The question is are we gonna see a retracement or a reversal?
Retracement
Price moves correctively, usually taking a longer period of time, and does not move much in terms of price.
Reversal
Price moves impulsively, usually taking a shorter period of time, and moves strongly in terms of price.
Knowing what constitute a retracement and a reversal is essential in knowing how to plan your trades.
1) If we see a correctively move lower towards 3077 area, it will present us a good opportunity to look for one more move to the upside towards 3360 area.
2) If we see an impulsively move lower breaking the trend line, we can expect price to move lower potentially towards 2901 area. If this happens, it will present us a good selling opportunity targeting 2901.
Based on our Elliott Wave analysis, with the current price development, we are expecting the 1st scenario to have a higher probability of happening.
Even if you are not trading the stock index, understanding and monitoring the equities market can provide us with the current market risk environment, and thus provide us with trading opportunities in the currency market too.