Will 3200 support level hold?

The STI fell to a lower point yet away after the US market retreat with GSPC dropping below 4000 points from Wednesday last week. As such, STI led by bank counters also fell to around 3200 level since Monday. While it has tried to climb back to 3240 on Tuesday, it will met with selling pressures yet again signalling that the market sentiments are poor for the time being. So far, there is little to be concerned about as the STI is still fairly reasonable in terms of its trend lines during this period of global inflation and instability. In the coming week, expect some challenge with the 3200 level but do expect further consolidation or near term weakness.

STI – Updated Daily Chart

The daily chart is pretty clear as it basically tells us that the sellers are eager to exit the market from Wednesday on but are also wary that there is a chance for rebound should the global market sentiment improves during this volatile period.

STI – Updated Weekly Chart

Bad news for STI as the weekly chart reveals that we are not trending below the 20 weeks MA. The only silver lining is that the 100 weeks MA should be able to come to its rescue should it approach the 3140 level in the coming weeks as mentioned in previous market outlook post.

Author’s Call as of 3rd September 2022

• The global inflation remains a concern and prices of commodities are still in a volatile state
• Charts are supportive at the moment but do expect further consolidation or weakness in the coming week
• The next support line at 3140 is supported by both weekly MA and daily support trend lines
• Investors who have been selling at a reasonable rate should be able to get significant discounts in the recent days and should further capitalise on them where appropriate

Author’s Call as of 27th August 2022

• The overall global market remains weak as more companies report earnings that are affected by inflation
• The daily chart shows that STI might be consolidating for the time being
• The monthly chart also supported that we are facing a significant resistance level in the near term after a failed breakout
• Investors can focus a little more on dividend paying counters as they cut dividend during this period