Arthur Wang Technical Analysis: STI ETF

Monday, May 26, 2025

STI ETF - 26 mAY 25

(SPDR Straits Times Index ETF, Ticker: ES3.SI, Exchange: SGX) on the daily (1D) timeframe.

🔍 1. Trend Analysis

✅ Overall Trend:

Medium-Term: The ETF has been in a broad uptrend since the October 2023 low (~3.30).
Recent Swing Structure:
- Higher Lows: 3.560 → 3.801 → 3.393 (April low), followed by recovery.
- Higher Highs: 3.925 → 3.979 → 4.000 → 4.012.
Despite the sharp drop in early April, the index held key support and has since recovered robustly to just under resistance.

📉 Trend Weakness Signs (Late May):

Recent candles around 3.95–4.00 show smaller range bars, suggesting loss of bullish momentum.
Volume has decreased during consolidation after the April recovery — suggests possible exhaustion or indecision.

🔑 2. Key Price Action Signals

📈 Strong Trend Bars & Follow-Through:

March 2024 to early April:
- Strong bullish momentum toward the 4.012 peak.
- March 25–April 2: Tall green bars leading to new high at 4.012 — strong buyers present.
April 3–April 10: Heavy red bars + spike in volume → sharp breakdown to 3.393 — classic bearish breakout bar, likely news-driven.

🔄 Reversal Patterns:

April 10–April 22: Strong bullish engulfing candles off the 3.393 low, coinciding with highest volume in the chart — institutional buying support.
May 6–May 20: Consolidation near 3.95–4.00 shows dojis and small real-body candles, potential pause before breakout or pullback.

🔍 Inside Bars / Dojis:

Several inside bars during mid-February to March around the 3.850–4.000 range show compression before breakout.
Dojis in May suggest indecision as price retests resistance.

🚨 Volume Spikes:

April 3–4: Significant spike in red volume, wide-range down bar → bearish breakdown.
April 12–16: High volume rebound bars (green), with closing near highs → bullish absorption & reversal confirmation.
Post May 10: Volume drops despite higher prices → waning demand near resistance (possible bull trap forming).

📊 Gap Analysis:

Gap down on April 3 was not immediately filled and followed by sell-off → clear continuation gap.
No visible gap-ups during this phase, but steady bars up from April 12 suggest gradual accumulation.

📏 3. Support & Resistance Zones

Price Level (SGD)	Type	Observations
4.012 – 4.000	Major Resistance	Previous swing high. Double-tested, not broken yet.
3.850 – 3.801	Support Zone	Consolidation before recent rally. Strong zone.
3.393	Major Support	Volume spike low, April bottom. Institutional demand.
3.560	Intermediate Support	Mid-November swing low. Secondary pullback area.

📈 4. Breakout & Pullback Analysis

✅ Breakouts:

Late Dec → Jan: Break above 3.925 was strong with follow-through.
April recovery: Break above 3.850 was high-volume bullish reversal, strong conviction.

⚠️ Weak Breakout Signals:

May candles approaching 4.00 are small-bodied, with decreasing volume, suggesting lack of breakout strength.

🔄 Pullbacks:

April 3–10: Sharpest pullback with demand confirmation (bullish engulfing near support).
Pullbacks tend to respect prior S/R levels (3.850, 3.801).

🌐 5. Market Context & Trading Bias

Current Context: Post-recovery ranging just under key resistance.
Bias: Neutral to mildly bullish in short term, due to strong rebound off 3.393 and current consolidation near highs.
Warning: Failing to break 4.00 with volume may signal short-term correction or range continuation.

💧 6. Supply, Demand & Liquidity Analysis

April 3–10: Bear trap. Volume surged at lows, price reversed — clear institutional accumulation.
Liquidity Trap Potential: Breakout above 4.00 without volume confirmation may attract breakout traders, but fail → bull trap scenario.
Trade Setup Opportunity:
- Pullback Buy near 3.850–3.900 zone if breakout fails.
- Breakout Play above 4.012 with volume spike confirmation (above 2x average).

💼 7. Risk Management Strategy

Trade Idea: Breakout Above 4.012

Entry: 4.02 (above resistance with volume confirmation).
Stop-Loss: Below 3.90 (last pivot low).
Target 1: 4.15 (approx 3.7% gain).
Target 2: 4.25 (round number & psychological resistance).

Alternate Idea: Pullback Buy

Entry: 3.88 (support zone).
Stop-Loss: 3.79.
Target: Retest of 4.00.

📰 8. Company News (Last 3 Months)

✅ Key News Items (SPDR STI ETF - ES3.SI):

April 2025 – MAS Policy Announcement Impacted Market
- Date: April 3–5
- Summary: MAS decision to hold monetary policy unchanged amid global headwinds spooked local equity markets, leading to a short-term sell-off. Investors feared slowing regional growth.
- Impact: Triggered the sharp drop to 3.393 (seen in the chart).
May 2025 – Singapore GDP Revised Upwards
- Date: May 15
- Summary: Singapore's Q1 GDP revised upward to 2.6% from 2.3%. Sectors like finance and tech rebounded.
- Impact: Provided macro tailwinds for STI ETF. Price held near highs but showed low momentum.

📌 Final Summary & Timeframe Bias

Timeframe	Trend	Bias	Comment
Short-Term	Ranging (3.95–4.00)	Neutral → Bullish (if breakout confirmed)	Watch for breakout above 4.012 with volume.
Medium-Term	Uptrend	Bullish	Healthy recovery from April sell-off.
Long-Term	Bullish	Bullish	Continues series of higher highs/lows from Oct 2023.

Disclaimer:Please note that this analysis is for educational purposes only and should not be taken as investment advice. Trading involves significant risk, and you should consult with a financial advisor before making any decisions.

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Arthur Wang Technical Analysis