STI is fighting a recession
As mentioned last week, the recession is almost certain if there are further gap downs this week. Right now, the world is stunned because of the huge interest rate adjustment of 0.75% that triggered concerns about the viability for growth in the US market. This led to significant selling in the past week as we can see from the charts below. A good question right now would be how long will this downtrend last and when will the rebound happen after a period of consolidation. The good news is that if you still have funds, now is the time to accumulate stocks that you bought at a significantly higher price. Bearing in mind that since fear is at a high, the price movements will also be more erratic than usual hence you can always do some light trading when there is a good enough spike for some of your counters.
STI – Updated Daily Chart
We are back below the 3100 levels since the daily chart broke below the lower level of the parallel channel. For now, the 3065 level should serve as a minor support level for the index.
STI – Updated Weekly Chart
The 100 and 200 weekly MA are coming to the rescue at least on the technical analysis side of things. So expect more irregular bounces at least in the coming weeks if the STI tries to breach those levels.
Author’s Call as of 18th June 2022
- Buying at a low is recommended right now despite the fear looming in the market
- The daily chart hints that 3065 might be the low that we hope the index will stay at
- Weekly chart clear shows that the 100 and 200 MA are coming to the aid of the falling index unless situation deteriorates
- Advise investors to take the opportunity of the fear in the market and buy companies with respectable fundamentals to tide past the coming weeks
Author’s Call as of 11th June 2022
- An impending correction is felt at a larger scale as we see investors become less aggressive due to rising prices
- Charts are also pushing back to the edge of support levels indicating that confidence in the market is below average
- A further dip in the coming week will throw STI into a bear market
- Investors should push buy prices lower if they can afford to miss some orders or are getting low on funds in the coming week
