STI Outlook - As of 31st May 2020

Support Level at 2500 held and US GSPC has broke 3000 resistance

Last week STI was trading at a crucial level of around 2500, in fact, it did briefly drop below 2500 on Friday. This is peculiar because US indices have not shown any significant weakness hence there is an expectation for STI to at least be mildly green as well. With Singapore restarting parts of the economy on Monday, investors would expect to see a positive reaction on STI, this is in addition to the 33 Billion 4th budget (Fortitude) that the Singapore Government has announced last week to provide continued support even after the circuit breaker has ended.

STI – Daily Chart

The emphasis of the daily chart was the volume, as it shows a clear rejection after attempting to break support at 2500

I deliberately included the volume of last Friday’s trading to show the significant increase in volume on Friday. This sudden increase in volume signals a rejection after STI attempted to break support at 2500. In short, buying pressure surpassed selling pressure and market optimism is might higher than normal.

STI – Updated Monthly Chart

Updates are minimal for monthly charts as STI is still resting below the lower limits of Bollinger band.

Unlike many other Indices of major economies, STI is still showing weakness and reluctance to climb back into the 2600-2800 range. At the moment, 9 Months MA is still far from STI and the monthly candlestick of May will be closing lower than April’s candlestick.

Author’s Call as of 31st May 2020

STI held above support at 2500 (volume shows significant rejection and strong support)

SG reopening parts of the economy on Monday and Stocks are set to open higher

US Indices and. futures are supportive of a recovering market around the world

STI is lagging behind other major indices however with the support from the 4th budget, we do expect some upside in near term.

Author’s Call as of 24th May 2020

STI might break support at 2500 (following its triple top formation)

SG circuit breaker is ending on 1 June explaining STI’s indecision (parts of the economy reopens)

Look out for Tuesday morning’s reaction on STI to decide if you should enter the market

Look out for counters in STI that have shown resilience in its business but weakness in market sentiments for the best value over time