STI Outlook - As of 5th July 2020

Value Investors will eventually win in the coming months

As the reliability of the US market continues to fall, STI is starting to realize that it does not have to wait for the US market to stabilize before it can start its recovery. This concept is hard to grasp because let’s face it, the markets are now acting erratically. Personally, my take is that those who buy and hold right now will be the biggest winner. However, it might still take a while before we are certain that this rally will break out of the parallel channel on the daily chart.

STI – Updated Daily Chart

STI is heading upwards to test the resistance again

On the daily chart, STI is showing bullish signals since the low on Tuesday. Since then, STI has been on a short term uptrend and is heading towards the upper limits of the parallel channel. This is in conjunction with some companies cutting dividends in the coming weeks. The question right now that is holding some investors back is that investors are still wary of the financial reports which will be announced in the coming months. In addition to that, the fear of the second wave of infections and lockdowns are also haunting investors with shorter time horizons.

STI – Updated Weekly Chart

STI is still on an uptrend at the moment on both RSI and its main chart

On the monthly chart, STI continues to head upwards at the moment. However, do note that the 9 months MA is still pointing downwards and the distance between itself and 20 months MA is still widening. Thus signaling that the inertia of the downtrend has not been eradicated completely.

Author’s Call as of 5 July 2020

Buying interest for STI components continues to increase in near term

Stabilization of pandemic in SG is providing some support for investors’ confidence

Looking out for the upper limits of the parallel channel on the daily chart for potential push back

Continuing to DCA is still the best method if you wish to accumulate or average down your previous month’s purchases.

Author’s Call as of 28 June 2020

STI has retreated along with the US indices in recent days and is approaching 2500-2550 levels

The current situation in the market is bleak unless there is good news with regards to the virus in the coming week

Opportunities are arising for further accumulation as markets continue to show weakness.

Volatility is likely to increase in the coming week