Market is prepping for a significant rally?

Singapore has ended its 2 months long Circuit Breaker and has lifted the ban of social gatherings to a large extent. Streets are almost back to normal and taxis are no longer on permanent green alerts. However, the market’s reactions have been nothing but muted in fear or geopolitical tensions and a resurgence of another wave in Beijing. Singapore’s market is getting increasingly well known for a strong currency and high dividend stock market. This means that until growth potential in other kinds of the market ends, less interest will be put in a slow and unexciting market. As to when that will happen is secondary because all that matters is to not be left behind.

STI – Updated Daily Chart

STI is clearly on an uptrend on the daily chart and there is no surprise because billions have been pumped back into the economy to support Singapore during these turbulent times. This excess cash will eventually find its way back into the market but there is no clear indication that the market is ready to bounce upwards when looking at the charts. There is also a chance for the market to retrace back to the lower green line of the parallel channel (2550-2575).

STI – Updated Weekly Chart

After attempting to break the 20 weeks MA, STI failed to breakout and is now hovering between 20 and 9 Weeks MA. There is reason to believe that there is a temporal weakness at the moment due to uncertainties caused by issues relating to the pandemic and other geopolitical tension. Some skeptics are also speculating that Singapore will return to circuit breaker mode if cases rise after resuming business as usual.

Author’s Call of 21 June 2020

• STI is on an uptrend in general but does not seem to show any aggression at the moment
• The uncertainty caused by fear of a second wave and geopolitical tensions between China and the US is holding the market back
• Value hunters are still anticipating further weakness after failing to break 20 Weeks MA
• Singapore market is currently showing greater dividend investment potential than other markets, as others are generally presenting greater growth potential.

Author’s Call of 14 June 2020

• STI retracement last week ended with a hammer showing that buying pressure is higher than selling pressure
• STI is sitting above 2668 support is in the middle of the parallel channel drawn on the daily chart
• Many businesses are trying to restart but are still facing a shortage of demand
• The market is optimistic in view of this year’s general elections and full reopening of the economy