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SGX Analysis



From the chart, we can tell SGX is still very strongly in its long term down trend. The 50 day moving average has just crossed below the 200-day moving average and trendline indicates SGX is still going to go down and is currently still experiencing heavy selling pressure.

There was a significant breakdown from its support line 3 days on 22nd Feb with higher than average volume at 8.80++ region and it fell to today's low at around the $8.50 region.

RSI is currently in the oversold region but this is not a signal to buy. Oversold indicator's are never a good reason to buy any stock. One good example is on the 14th Jan where the stock entered the oversold region. It was at $11. 6 days later, SGX hit a low of $8.10 and it is still in the oversold region. So if u are lucky and bought at $8.10, kudos to u. If u bought anywhere from $11 to $9, Amen....Even if you held on to the stock, the bad market sentiment and huge drops may have prompted you to cut loss early and give up on the later gains in this stock.

So how do we use oversold indicators to get into the stock? Technical analysis indicators are seldom useful on their own and RSI is no exception. Typically u can use RSI coupled with a short-term trendline break upwards to get into a low risk/high reward trade.

I have always recommended SGX based on its prior performances of rallying together with the market but now....I think its time for us to sit on the sidelines and observe when SGX will hit a support region.

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