In our update last month, we were bearish on the STI. Today, we are still bearish on the STI. Price has declined below the previous low and there is a high chance that the index will continue to decline further. The index could decline further to 2955 before there is a reversal.
Both Base and Conversion lines are bearish and their slope are steep. This is a hint of a strong bearish trend. Lagging Span confirms the bearish trend. Lagging Span is below price of 26 periods ago as well as below the cloud. MACD is bearish with both its lines below the zero line. MACD is pointing down, further hinting of more decline. However, if MACD is able to avoid moving below the momentum low in late Aug 2019, there is likely to be a bullish divergence and could be a hint of a possible index bottom.
On the monthly chart, this index has also fallen below its big Triangle chart pattern. This is a sign of more decline for the index. Usually a triangle is the consolidation before the last movement. So the current decline from the monthly chart’s Triangle pattern could be the last decline.
We remains bearish until a reversal signal is seen.