Last week, the price action was clustered around the resistance level, forming a small pullback that may be interpreted as a flag. However, we have not seen a strong breakout or follow-through from the flag, which we should be looking out for this coming week. Given the strong close on the US front after the positive jobs report on Friday, we should see the STI gap up on the open. Do not be tempted to chase the market, and wait for a good setup for entry. If you want to take a long position, go in with 1/2 or 1/3 your usual size, and trail your stops. Based on weekly swing counts, the trend is still down.
For those who have no positions, do not be sore about missing out. Trading is about making calculated risks, and part of the challenge is accepting the reality that you will be wrong 30-40% of the time. Be skeptical when people claim to consistently pick the tops and bottoms with “special” methods. If their method works so well, they would be working for a fund trading millions of dollars instead of selling their “special” methods for a quick buck. Stick to the core principles, and trust yourself. Self-proclaimed gurus come and go, but the core tools of technical analysis have stood the test of time.