On 8th July (patreon), I wrote about my potential short on DBS if market played out according to my analysis. This is just a “sharing” post and not a call for you to do anything.
This week I’m re-looking at my piror short positions on DBS and Hongkong land (already exited) and the potential for future short entries. The main reason is due to its correlation with STI.
DBS – Weekly Chart
Since 18 April (the first written date of my short call), market have made not much difference other than retesting the strong weekly resistance level.
It is still trading in a wedge pattern, with a highly probability to break towards ≤ $15.40.
Market accumulation/distribution graph show that people are distributing their prior position (selling off > accumulating positions).
DBS – Daily Chart
Similarly, market on the daily is trading in a wedge pattern, with price above the 100 day average while retesting the bearish trend support channel.
In order for a “sell” to be executed, i would love to see price break off nearest structure low and retesting it. If market do play out in the way desired, my first initial take profit will be at the weekly structure low of $16.63 and my stop loss will be at structure high of the bear move of $22.50. The potential Risk to Reward ratio is 1 : 2 +/- .
However, if market didn’t play out as expected and broke off $23.58, we are looking at a potential bull run for DBS.
Hong Kong Land (H78)
My actual initial stop loss have not yet been hit, but i did pull out my initial position early due to VIX in consolidation at the time of my post. Since then, nothing much have changed; market is still in the same price range as my previous short.
HongKong Land – Daily Chart
Market is also trading in a wedge pattern on the daily chart with current price being supported by the bullish channel. Based off prior price actions that happened from 15 April to 26 May (in purple), show that if market do breakout from the wedge pattern, an immediate rejection towards $3.47 is highly likely.
My entry execution will be at $3.86 with stop loss set at $4.11 and take profit set at $3.48. My risk to reward ratio will be 1 : 1.73. If a parabolic break is present, i will exit 90% of my position and trail the rest of my “short”
My Take
My short is supported by STI correlation on the monthly chart and the decreasing volume accumulation of DBS stock. This suggest the pump towards $23 might just be a fakeout for institutions to exit their positions.
Nonetheless, I’m just trading the probability as the downside reward is more beneficial than the upside.
May the odds be in our favour.
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