Market Updates (STI) 20 Aug 13

STI_daily_20Aug

STI dropped 80 points within 3 days and landed exactly on the supported at 3,125. For those who had shorted intra-day, Good for you. As a risk management technique, do cover most of your short positions before the FOMC announcement as news play is always risky.

If things decided to turn real bad after the FOMC announcement, the further drop will be quick and fierce. After some analysis, the next few supports level are indicated in the chart. Look for market reaction near the support and resistance.

Update on 22 Aug 13 @1.45pm
STI gap down and is trapped within the support 2 zone of 3,065 – 3,080. This shows how accurate is the support.
Looking at the rate, the support 2 will likely be broken soon.

STI_daily_22Aug

Market Comments (STI) for Week of 19 Aug 13

STI_daily_16Aug_

Due to the concern of QE tapering, the STI ended the week with a breakdown below 3,200, below its trading range. However, the candlestick seems like a doji with indecision on Friday 16 Aug 13. It is good to observe for a couple of days more next week to ensure no false breakdown due to market over reaction to news. If it is false breakdown, one may enter for buying opportunities. However, if the breakdown is confirmed, then the next support will be at 3,125. Short term traders will need to exit their trading range play. Aggressive traders can go for shorting intra-day while more conservative traders can wait to see how the index react near its next support.

Market Comments (STI) for Week of 29 Jul 13

STI_daily_29Jul

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.