Resistance turned support line at 2812

STI experienced a few days of profit-taking from a peak of 25 November 2020. Since then, the market has been undecided but has been hovering around 2812. During the week, we did notice several attempts to break below 2800 even however buyers always fought back and held the line. At the week’s closing, STI still closed on the red partially because of the further delays in the SG-HK travel bubble. In today’s post, we will analyze the present situation based on technical analysis to see how we should react in either case of a dip or spike in the index.

Basically the market is on a uptrend but individual counters are never performing uniformly. Therefore try to view each of the constituent in your watchlist objectively as some weakened counters will still remain weak in the near term unless that particular company has updates to their businesses. For us, I notice that many counters are still performing very poorly due to various reasons relating to the pandemic as such, I do not take profit aggressively unless the chart hits the 200 days MA too quickly or if the stock has a huge spike relative to the index.

STI – Updated Daily Chart

On the daily chart, we can clearly see that STI’s ex-resistance has now turned into supported there was a successful bounce from 2812. However, STI did close under the 9 day MA which is rather odd since the market was quite bullish on Friday afternoon. Another conflicting occurrence is that the index closed on the day’s high as well. Such mixed messages probably mean that the market is undecided.

STI – Updated Monthly Chart

As for those of us who are wondering if the index still has room to climb, fret not because we are just at the start of the major cycle of the index. So far, we have bounced significantly from the bottom of the parallel channel as marked out on the monthly chart and since STI is still considered below its norm or rather the pre-COVID state, we should expect more room for the index to climb with small corrections happening every now and then.

Author’s Call as of 6th December 2020

• STI bounced from the resistance turned support line at 2812
• The further postponement of the travel bubble was probably counteracted by the hype from the SingapoRediscover voucher
• STI might be boosted by the news from Singtel-Grab full banking license, SATS has also exercised the option to raise more money
• The monthly chart suggests that there is still a lot of room to climb for the index (in the long run)

Author’s Call as of 29th November 2020

• STI rally showed last week after crossing the “crisis line” at 2800 but has stayed above and is supported by 9 days MA
• Trump willingness to concede supports market perspectives who are looking forward to a Biden presidency
• Holidays approaching and higher consumer spending is expected resulting in higher revenue
• Many greed rallies have halted in view of the suspension of the travel bubble postponement