Fragile world threatens global market
The STI performance throughout the Russia-Ukraine invasion has been quite positive relative to other countries that have closer trading relations with Russia. That said, we are still in a fragile state as well because this war seems to have no forseeable end. No one knows how this is going to pan out as well because the media has been trying to imagine all sorts of devastating scenarios that can lead to more deaths and destructions. On the market side of things, investors are already in a dilemma especially when we were just approaching the “end” of the pandemic. In this week’s market outlook, we will do some basic discussions on how STI would potentially react in the coming week based on technical analysis.
STI – Updated Daily Chart
The STI daily chart shows that we have just went below the support at 3240 probably because of the news of the nuclear reactor in
Ukraine getting attacked by Russians. Without an effective stopper to at least inspire a ceasefire, I am unsure when the market will start feeling optimistic again. This means that we might be in for some downside or horizontal consolidation.
STI – Updated Monthly Chart
The STI monthly chart has also just crossed the middle uptrend line. This should provide some support if the war does not escalate too much but it should not be enough to provide much comfort for investors.
Author’s Call as of 5th March 2022
- The war in Ukraine still haunts the market with much volatility and fear, therefore we should only see a reversal when there is a light at the end of the tunnel
- Daily chart support at 3240 was crossed on Friday and the market remains weak in terms of sentiments
- Monthly chart also shows signs of weakness as we cross the middle uptrend support line
- Investors should practice caution in their trades as the world continue to evaluate the long term impacts of the situation on the market
- The correction did happen and this time the trigger was due to the war in Ukraine
- In the near term, we are unsure how this war will pan out hence, more time is required to know when STI will move up again
- The monthly chart showed that the gains in February was wiped out in the past week and might be ending the month with a weak candle
- Investors should have bought back stocks sold on Thursday when the market was in a panic state but stay cautious for the time being and expect more volatility in the near term.
