Outlook not rosy and STI might consolidate for a bit

The global outlook this year pales in comparison with what was expected and the market is starting to show it bit by bit. In the past week, we saw optimism dissipate from the market as investors continue to pull out capital from their lack of confidence with the current valuations. As such, we should be expecting some consolidation or further downside for the coming weeks. In this week’s market outlook, we will look at the charts to find support levels that we can rely on if the market dips to identify opportunities to reenter the market.

STI – Updated Daily Chart

STI closed with a large red candlestick as the global market continues to stay fragile. At the moment 3240 is holding however it is likely for STI to trend lower due to its slowing momentum and lack of positive stimulus from the news.

STI – Updated Weekly Chart

I added 2 more lines to the weekly chart to show how STI can move while maintaining its uptrend. Do take note that the middle line will be the first realistic ”bottom” in the near term and it is still possible for STI to shoot up higher if there is a sudden surge in the market. Currently, the realistic support line points to around 3180 on the weekly chart.

Author’s Call as of 20th August 2022

• Market is running out of optimism and we are likely going to consolidate or trend lower
• 3240 is currently holding but is unlikely going to be a strong support level
• The next support level should be around 3180 if the market stays lukewarm in the coming weeks.
• Investors should look at their counters and identify support levels to buy back what they have sold in the past month or so

Author’s Call as of 13th August 2022

• STI fail to advance in the last week as we are in overbought as we have climbed almost consistently for 2 weeks prior
• Funds have been rotating around dividend counters like banks and REITs and are starting to take profit along with short term sellers
• The daily and weekly charts are pointing towards the 3180 to 3240 range
• Start positioning ourselves for buying opportunities but do not rush back into the market to get better deals.