Coronavirus Outbreak= Justification for STI to fall
Wuhan Corona Virus has been milked heavily to justify the correction of the US market and subsequently the rest of the world. Surely, it has affected major businesses such as air travel and tourism but it has also gave investors the reason to retreat a bit and start “fearing.” In my point of view, the only time to accumulate like what I have mentioned in the first post of the year is when the market is running away with fear. There are a few ways to play this, one is to accumulate as and when you feel the price is fair and the yields are decent, otherwise, you can give the bottom of your counter when STI hits resistance. As for Loopholes Singapore, we believe that since the price of those affected counters are already cheap, we will accumulate according to how many bullets we can fire at.
STI – Updated Weekly Chart
Next weekly uptrend support at 3127 is unlikely to hold unless there are positive developments about the virus spreading in China and the rest of the world. However, in my point of view, seeing how China is spending so much in such a short period of time to build hospitals. I guess the news will just keep on flooding the newsroom in the following weeks.
9 & 20 Week Moving Averages crossed showing signs of trend reversal
STI will likely test 3127 in the coming week and head for lower bounds of the bollinger at around 3000. At that point, we will be able to see if the Wuhan virus has had a turnaround or if it is going to trigger more fear and legitimacy for a worse meltdown. Chances are, the hype would again have died down by then. Think about the forest fires in Australia, though it is still ongoing, many people have already lost their perspectives on it.
Author Call as of 2 February 2020
- STI heading for a ride downhill due to virus worsening along with WHO status update
- STI is still modest hence the impact would be less severe as compared to US
- Fear still haunts all affected businesses and investors should exercise agency in the matter
- STI is heading for 3127 then 3000 if there are no turnarounds for the virus
Author Call as of 26 Jan 2020
- STI going through correction (supported by Wuhan Coronavirus)
- Next support levels at 3227 and 3200 according to 9 and 20 weeks MA
- Overall STI is still in long term consolidation and will unlikely breakout due to global economy disability
