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STI in 2018
In overall, the Singapore's benchmark index, the STI, kick-started 2018 with 3,406.48 points and moved higher to breach 3,600 level before going down in late January towards the 3,320-3,340 level. The bulls made another two attempts in March to hit 3,600 level, but failed. Finally, a fourth attempt was made in April and the bulls succeeded in breaching the 3,600 level for the second time in 2018. This was the last time price could breach 3,600 level, before the bears took over once again and drove the price down back to the 3,320-3,330 level once again, this battle between the bulls and the bears was summed up to be a consolidation trend for the first six months.
The bears eventually pushed the price down and broke the 3,320-3,340 level. The next strong support, which is the ultimate support, would be at 3,200 level. This 3,200 level had been supporting the price above since May 2017, showing how strong the bulls were. The bulls attempted to support the price at the 3,200 level in July once again but this only lasted two months. From September 2018 onward, price broke below the 3,200 level decisively twice and although there were signs of fierce fighting between the bulls and the bears, the bears won and pushed the price further down below the psychological 3,000 level before the bulls fought back, pushed the price back up above the 3,000 level and as of today, is still fighting to stay afloat above it.
What can happen in 2019?
Throughout 2018, price was basically in a trendless period before a downtrend was formed. A downtrend was formed when price made a successive lower peaks and lower troughs. Towards late December 2018, a higher low was formed and this signifies the end of the bears. However, as of today, 31 December 2018, neither the bears nor the bulls are taking charge right now.
Personally, since the bears failed to stop the bulls in making another lower low, I am slightly bullish in the Singapore market in early 2019.
Picture 4: Chart of STI weekly chart, depicting 2,950-3,000 level.
If we look at the weekly chart, you would see that the current bearish price movement could be a possible return to the 2,950-3,000 level. This level was not back-tested ever since price broke above it just as 2017 started. MACD indicator shows a slight bullish strength, but it is still not enough in my opinion.
Conclusion
All in all, if you ask me which way STI will go in 2019, I don't have a precise up or down answer because we are looking at uncertainty and price is currently in a sideway mode. But, I would say do watch out for these two levels - 2,950 and 3,200. These two levels are highly critical.
For the bulls, in order to start moving the STI up, price must break the previous
high of 3,192.88 formed on 3 December 2018 (or decisively above 3,200 if you are looking for a whole number).
Whereas for the bears, in order to start moving the STI down, price must break the previous low of 2,955.68 formed on 26 October 2018 (or decisively below 2,950 if you are looking for a whole number).
This is despite me still looking at a potential STI of 4,000 written in an article before.
Once again, I wish you a Happy New Year!
