Market Comments (STI) for Week of 29 Jul 13


The STI index is experiencing consolidation for the past 1 week. It is trading within the support and resistance 1 as mentioned in my posting of 14 July with the high of 3,277 on 24 Jul 13. There were some profit taking last Thurs and Friday.

For the coming week, the resistance will still be at 3,265 – 3,280 and the support is at 3,205. Currently, the index is supported by its 200 days and 13 days MA. Currently, a second higher-low has been formed and I would to say that the index is well supported and has stabilised. As mentioned in my previous post, as long as the immediate support of 3,205 is respected, any retracement towards it will allow buying opportunities.

Last but not least, I am in the market again and is currently positive.

Market Comments (STI) for Week of 15 July 13

STI 15 July 13

STI is reaching its target 1 at around 3,265 – 3,280 pretty soon. Last Friday (12 July) had some profit taking activities. The immediate support is at around 3,205 – resistance turn support. If the index is able to clear target 1, then we are looking at target 2 of around 3,340. Depending on the strength of the index, there are likely to have some consolidation along the way.

If the immediate support is respected, any retracement near to the support is a buying opportunity. You will need tight stops in the current climate of QE tapering.

The bank counters have moved up. Based on sector rotation, other fundamentally good counters are likely to move up after formation of patterns and breaking of resistance. Look out for it. Some analysts asked their clients to watch out for SembCorp Marine, Keppel Corp, SIA, REITS, First Resources, Indo-Food Agri, which are either forming their base or testing resistance.

My take – Trade cautiously and do have a trading plan.

Market Comments (STI) 11 July 13

Bernanke backs stimulus for forseeable furture amid QE debate.He said “Highly accomodative monetary policy for the foreseeable future is what’s needed in the U.S. economy”

STI have broken 3,205 resistance level at open today (11 July) If Bernanke doesn’t say anymore rubbish, STI will slowly recover. It is highly anticipated that STI will close above 3,200 today.

There can be 2 strategies for swing trades –
Strategy 1 – Enter today in fundamentally sound counters. Identify the previous low as support. Exit when traget is reach.

Strategy 2 – Let the index consolidate further, forming a higher low first and enter at new support. There are pros and cons in this. Pro – enter when market direction is clearer. Cons – the counters might have all run for sometime already.

Market (STI) Comments for Week of 1 July 13

STI_1 July

If you refer to my last posting, the support of 3,055 was well respected. The STI was lowest at 3.065 on 21 June 13.
After the whipsaw last week, I would advise not to take on any swing position of STI component stock unless the index moves above 3,205 and stay there. This must be couple with crossing of 5 and 13 EMA. The index is still rather weak now. The new support is now at 3,140.