Eventually investors will get used to inflation and rising rates

There has been little to no movements for the past 2 weeks because the global economy still remains weak for the most part. As for STI, we have been consolidating because our major bank counters are actively increasing loan interest ranks to match the increase of the Fed fund rate. On top of that inflation continues to threaten global supply chains and causing energy and food prices to shoot up that eats into the profit margins of companies recovering from the Pandemic. For now we are still waiting for some form of impactful news as there might be some new developments from the war.

STI – Updated Daily Chart

Lacking the willing to head up, STI continues to stay weakened for the time being. Unless prices stabilise, counters depending on the recovery of the pandemic cannot head up. If the interest rates continue to head up, equity markets will continue to stay mellow.

STI – Updated Weekly Chart

The 100 and 200 weekly MA is about to cross but it might bounce if there is insufficient momentum. Keep a look out for those moving averages in the coming weeks for further confirmation.

Author’s Call as of 2nd July 2022

• Global markets are still in a weakened state due to the war and rising interest rates to curb inflation
• The charts shows that STI is still range bound for now and is waiting for triggers before deciding to head up or down
• The moving averages in the weekly chart will soon meet and that might provide some support if there is sufficient momentum
• Suggest that investors can still deploy capital into areas that are weakened due to fear of lower profits as revenues are bound to increase this year due to the recovery as well as inflation

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