Here comes the ride we have been waiting for

I suppose many of us have been wondering if the uptrend has truly ended and if we can start seeing greater discounts in the market. As we continue to see community cases in Singapore, there is always a real risk for a sudden surge in unlink cases forcing the government to force another round of circuit breaker. On the other hand, there is also another possibility of a sudden recovery in the coming days or weeks such that there is an early lifting of the current restrictions. As investors, we do not guess, we take the market as it is and do what we can with what we have. In this post, let’s take a look at the charts so that we can plan ahead for whatever the outcome is in the market.

STI – Updated Daily Chart

The daily chart continues to show market weakness simply because there is no real good news to boost the confidence of buyers to return to the market at the current valuations. In fact, one might take additional caution knowing that a sudden spike and an announcement to lock down the country once again might send all recently purchased stocks down the drain and devastating our yields. Therefore, I am glad to see that the markets continue to stay mellow with a slight expectation of better news ahead in the coming days or weeks. As we know there will be a review on Thursday or Friday to see if there is a need to adjust the current measures so we will have to wait for that meeting before we can determine with higher confidence whether the market will trend in either direction.

STI – Updated Weekly Chart

As for the weekly chart, we are seeing some level of resilience as the index continues to stay above the 100 months moving average. Honestly, this year’s growth or rather rebound from last year’s GDP will be lower than expected by analysts due to the heightened measures but overall, there is still sufficient optimism in the markets for retail and institutional investors. That is resting on the assumption that community cases can be kept Low and back to zero and restrictions lifted sooner than later.

Author’s Call as of 22nd May 2021

• Watching the number of community cases closely for signs of recovery or further retracement
• The daily chart shows that STI is back in the parallel channel marked out at the start of this year
• Investors continue to stay cautious in the recent days and market movements have been slow
• Investors should consider carefully when buying stocks at the moment, selling might be a wiser move to take some profit

Author’s Call as of 15th May 2021

• STI’s correction finally arrived and investors who have taken action in expectation of it benefitted immensely
• Clusters formed in multiple parts of Singapore however with more citizens vaccinated, the health impacts are less devastating
• Business is better equipped to operate as they have gone through varying stages of restructuring and digitalization
• Investors should look at sectors that were overheated in the past months and decide on potential entries for a significant discount