STI KST Chart

The KST cut above its 8 day exponential average on 26 Mar. Based on historical pattern, this is a bullish sign.

Looking back at the chart, the last time this happened was on Feb 14 08 and the index went from 2949 to 3098. A 5% up move in 5 days.

KST On STI

The chart looks bad. The KST made a dead cross on the 8 day exponential moving average. I hope that the market will rebound but the chart is telling me otherwise.

Good luck to the bulls. You will need lots of it.

KST Indicator On STI

There is a request to do a KST indictor for STI. Here is the chart.

The red line (KST) has turned down and is about to cut the green line (8 day exponential average).

Just as in the case of Dow, STI is also at a crossroad.

KST Indicator On Dow

I just did a KST indicator on the Dow Jones Industrial Average.




For the past one year, KST has been very accurate in giving early warning on impending down swing. Just look at the chart.


It will be interesting to see whether the same scenario will play out. The KST (Red line) is now very close to the 8 day KST exponential average (Green line).


Get ready for some action tonight.

KST Indicator Case Study - YangZiJiang

This is another case study on KST. This time the request is for analysis to be done for YangZiJiang. If you missed my previous post on definition of KST, please read it here http://stockstudent.blogspot.com/2008/03/kst-indicator.html

Data range is from 18 Apr 2007 till 6 Mar 2008.



In total there are 6 trades based on the KST signals. Out of the 6 trades, 3 were profitable and 2 were losers. There was an entry signal on 4 Mar and the trade is now showing a gain of 5.39%.

KST Indicator

KST (The Know Sure Thing) Indicator

This indicator was first introduced in the early 1990s. It uses four rate of change values to determine the trend of the market.

The formula is as follows:

ROC1 = (1-Price/Price(X1))*100;
ROC2 = (1-Price/Price(X2))*100;
ROC3 = (1-Price/Price(X3))*100;
ROC4 = (1-Price/Price(X4))*100;

Where Price refers to current closing price and Price(X1) refers to the closing price X1 bars ago.

KST = MOV(ROC1,AVG1)*W1 + MOV(ROC2,AVG2)*W2 + MOV(ROC3,AVG3)*W3 + MOV(ROC4,AVG4)*W4

Where MOV(ROC1,AVG1) refers to the AVG1 day moving average for ROC1

For Short term trend, Martin J Pring suggest the following parameters:

X1 = 10
X2 = 15
X3 = 20
X4 = 30

AVG1 = 10
AVG2 = 10
AVG3 = 10
AVG4 = 15

W1 = 1
W2 = 2
W3 = 3
W4 = 4

Let’s look at an example for this indicator. I have chosen Lu Zhou Biochem as a case study.



Entry rules:
1. When KST crosses below its 8 day exponential average, short at the next day opening price

Exit rules:
1. When KST crosses above its 8 day exponential average, close short position at the next day opening price

These simple rules gave rise to the following trades:



Out of 10 trades, 7 were profitable.

For more information regarding the KST indicator, you can refer to the book by
Martin Pring – Technical Analysis Explained.