STI first week of rally stopped at resistance level 2533
With minimal ups and downs happening in STI, it is hard to chart reliable support and resistance levels. At the moment STI is still on the rise although experiencing some resistance at 2533 as shown on the weekly chart last week. Companies are set to release their next financial reports in the coming week therefore expect volatility and volume to increase. Cyclical stocks like banks, tourism, and the aviation sector still hammered by the impacts of low-interest rates, and travel restrictions will expect a slow recovery for the rest of 2020. Although, the QoQ performance will likely be positive for investors who are vested since Q2.
STI – Updated Daily Chart
STI daily chart shows a slightly convincing breakout from 2500 psychological level. The sharp drop on Friday reflects trades made by short term trades in the market. Comparing 9 and 20 days MA, STI is still on an uptrend with the next support level at 2519.
STI – Updated Weekly Chart (Historical Reference)
The weekly chart showed that STI is still limited by the 2533 resistance level. As of last week, STI attempted to stay above 2540 for a few hours before falling back to 2533 and then closing just below 2533. This shows that sellers are still present and buying pressure has not come back into the market with its full force.
Special Feature: Suntec REIT (T82U)
Recent acquisition plans are putting investors at a dilemma especially short term retail investors. With the new acquisition, T82U will maximise its debt allowance while increasing its asset value significantly. The overall positive impact might very well outweigh the negative. Furthermore Suntec is back at its uptrend support since the low in March. Investors might find this stock interesting in the near term for both value and short term gains.
Author’s Call as of 11th October 2020
- US’s drama continues on the presidential and VP debates and US indices continue to head north
- STI’s rebound from the 2450 level was aggressive but still facing selling pressure nearing the end of the week
- Overall uptrend still intact and more companies will be announcing their financial reports in the coming weeks
- Awaiting institutional buyers to come back to the SG market
Author’s Call as of 4th October 2020
- Trump’s condition is stable but is likely to negatively impact risk assets in the world as Biden’s supporters grow
- STI showing some level of resilience in the past week (potentially funds are coming back to SG markets)
- Cyclical stocks might be benefiting from the recovery of the economy as SG move towards phase 3 (post-CB)
- STI is still hovering around 2436 to 2533 but does not show obvious signs of recovery
