Can the unstoppable Omicron Variant stop the STI?

The Omicron variant has been formidable as it spreads and dominates most of the new infections around the world. At the same time, it has also gave governments, that have access to the vaccine, ammunition to enforce that the booster jab (3rd or perhaps even 4th) be a mandatory requirement to be considered fully vaccinated. At the moment, we are definitely facing another wave of infections as daily numbers and infection rates has gone up significantly but the market has so far reacted in a rather neutral or positive manner. Instead of tracking US market corrections and/or retreat due to the Fed’s new stance, the STI climbed in the past week and crossed the 3200 psychological barrier. In this week’s market outlook, lets take a closer look at the index and see where is the STI positioned at the moment in relation to the current Covid situation.

STI – Updated Daily Chart

The daily chart has so far been a rocky one for most days of last week has we had a rollercoaster ride due to the US’s correction. Nevertheless, after Wednesday’s retreat, STI advanced ahead and closed at 3205 on Friday as the index was led by our highly weighted bank counters that benefits from the potential rate hikes. At the moment, the index has not provided any confirmation that it will stay above 3200 as Friday’s candlestick is only mildly positive.

STI – Updated Monthly Chart

The monthly chart Is finally showing more optimism as we approach the mid level of the uptrend “division” line. From my perspective, this means that investors are deliberating whether STI will be able to live with COVID with all of the current and future variants with our current protocols and measures in place.

Author’s Call as of 8th January 2022

• Investors are still vary about COVID affected sectors but other sectors like banking are advancing ahead in the past week
• In the short term, STI shows a slight positive outlook but we are still unsure if it can hold its position above 3200
• Approaching the uptrend “division” of the monthly chart, investors are still unsure if Singapore can live with COVID
• 2022 has so far been positive as the MTF has not raise restrictions for the community at the moment despite the higher transmission rates of the new Omicron variant
• Investors should consider shaving their holdings once again if they have used backup funds to join in the ride after the major dips to secure some profits and get back some of their capital

Author’s Call as of 1st January 2022

• The STI continues to be threatened by the restrictions around the world due to the Omicron variant
• Daily chart shows that the index is still supported by both psychological level and uptrend support line
• As for the weekly chart the STI is still hovering above the 50 weeks moving average (maintain uptrend for the entire year of 2021)
• Investors investing in the Singapore Market should continue to look for value to be unlocked from matured counters in the new year