There has been two instances where STI opened on a huge gap down and covered back the gap at the end of the day with heavy volume and that to me, is significant technically. I have highlighted those two days and their corresponding volume with purple rectangular boxes. Why are they significant ? This is because this shows that there are buyers in the market who are willing to buy in at lower prices. Usually, the huge gap down is caused by a dismal closing for the DJIA.
On the 28th of Oct, STI opened at 1496.12 and touched a low of 1473.77 before closing at 1666.49. Percentage-wise, STI managed to chalk up a huge gain of 11.6%. On the 7th of Nov, STI opened at it's low of 1717.66 and closed at 1863.49 and we are talking about a percentage gain of around 7.8%. The movement of these two days suggest that the downside risk is getting limited.
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