The market plunged as expected and we saw many support levels cracked. Especially S-shares, last 2 weeks saw them testing their support levels and looked firm. It may have induced alot of investors in. Genting and Golden surely have trapped many. With these supports giving way, more downside to come. However, the volume was nothing much to shout about. With my volume screening rule, it reveals that many of these support levels cracked but not many are with heavy volume signifying lesser participation. Unlike resistance, support broken with light volume doesn't mean it won't fall down further. It is like an avalanche, as it falls, more and more players will feel the heat and one by one they start to sell creating a snowball effect. This is where we see the price keeps dropping on light volume....dying a slow death. Rather, if we see high volume sell off, then the market has a chance to recover faster.
STI is trading too close to 3000 for comfort. Should we break this psychological level, there will be talks again about seeing STI at 2700.
Due to the gap downs, i find the current risk reward not good to add to my shorts. But those stocks hanging near their 20/50 day low will be shortists target. XPertTrader users can use this rule to screen for these stocks.
DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.
