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.

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