Hong Leong Finance - 13 Aug 25

• Stock Name & Ticker: Hong Leong Finance Ltd. (S41.SI)

• Exchange: SGX

• Chart Timeframe: Daily (1D)

• Analysis Period: ~11 months (Sep 2024 – Aug 13, 2025)

• Total Bars in Focus: ~220

• Last Traded Price: SGD 2.57

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🔍 MARKET REGIME CLASSIFICATION: Transitioning to Distribution

The stock recently transitioned from a strong uptrend into a potential distribution phase characterized by volatility expansion, wide-range bars, and climactic volume signatures.

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📌 HIGHEST CONVICTION OBSERVATIONS

1. Market Structure Shift (Break of Structure / CHoCH)

• Recent swing high: 2.81 (mid-August 2025)

• Most recent breakdown: Price collapsed back to 2.57 after peaking, violating recent higher low at 2.70, confirming CHoCH

• Prior confirmed SH/SLs:

  • SH: 2.59 (May), 2.81 (Aug)

  • SL: 2.40 (April), 2.51 (July)

• Break of structure (BOS): Occurred with a sharp downward bar, breaking below 2.70 support

• Implication: Weakening bullish momentum; price is now back-testing former breakout level at 2.57

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2. Volume-Price Relationship & Institutional Footprint

• Climactic Volume Spike: On the recent large red bar (likely earnings-related), a wide-range sell bar with extreme volume points to institutional distribution or panic selling

• Absorption Candles Detected: Earlier in July at 2.60–2.70 zones, small real-body candles on rising volume indicate possible smart money exit/liquidity provision

• Effort vs. Result: Very high volume on breakdown day yielded a deep drop = effort confirmed by result — implies professional unloading

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3. Institutional Shake-Out & Liquidity Grab

• False Breakout Above 2.75–2.80: Rapid move above 2.75 followed by an immediate reversal signifies liquidity hunt

• Trap Pattern: Breakout above psychological 2.80 triggered stops and drew in late bulls — classic retail trap followed by swift institutional rejection

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4. Bar Pattern Recognition & Gap Analysis

• Latest Candle: Wide bearish engulfing bar with high volume and full-body close — strongly bearish

• Gap Analysis: A minor downside gap suggests breakaway behavior; unlikely to fill immediately without bullish catalyst

• Pattern Status: No reversal signal yet; continuation likely unless a strong bullish reversal bar emerges near 2.50

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5. Multi-Timeframe & Psychological Confluence

• Support Zone Retest: Current price sits directly on former resistance turned support (2.57), previously tested in April & May — key confluence level

• Next Key Psychological Levels:

  • Support: 2.51, 2.46, 2.40

  • Resistance: 2.65, 2.70, 2.75

• Compression Risk: Volatility expansion indicates possible continuation move before compression resumes

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🎯 EXECUTION ZONES & RISK FRAMEWORK

• Bias: Short-biased near resistance unless reclaimed

• Entry Zone (Short Bias): 2.65–2.70 (low-volume retest failure preferred)

• Initial Stop: Above 2.75 (above false breakout pivot)

• Profit Target 1: 2.46

• Profit Target 2: 2.40

• Risk-Reward: Approx. 1:3 if triggered at ideal zone

• Partial Profit Strategy: 50% off at 2.46, rest trail stop past 2.40

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⚠️ CHECKLIST BEFORE EXECUTION:

• Confirm rejection wick or failed test near 2.65–2.70

• Monitor volume behavior — must not exceed breakdown day’s volume

• Align lower timeframe rejection bars (1H or 4H) near resistance

• Watch for news or catalysts affecting sentiment

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🔮 TRADE SUMMARY

Selling HONG LEONG FIN (S41.SI) because of confirmed change of character and institutional distribution signs with stops at 2.75 targeting 2.40 for 1:3 risk-reward ratio.

• Confidence Rating: 8/10

• Key Levels to Watch: 2.40 (major support), 2.65 (short trigger zone), 2.75 (stop-loss invalidation)

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.

Dividend:  5.37%