Straits Times Index (Week of 29 June 2020)

During the week of 22 June, the Straits Times Index (STI) ended at 2,604.51 points. How will it fare for the week of 29 June?

Picture 1: STI daily chart via TradingView

Confirmation of downtrend 

After a lower high was formed, price continued downward and touched the 1st support region as expected. It made a lower low last Thursday at 2,574.85 points. STI is therefore, confirmed to be in the bear's territory for now.

STI pierced down its 1st support region twice

There were two occasions when STI broke below its 1st support region.

Firstly, a comment made by the US White House adviser which was "misinterpreted" had sent the STI down during the first half of trading hours on 23 June 2020 and pierced through the 1st support region. It later made a V-shape recovery before the lunch break after the adviser clarified that the China trade deal isn't over.

Secondly, STI gapped down two days later on 25 June below the 1st support region. For this, I did not study into why exactly it happened but it is likely due to the US side with the increasing number of coronavirus cases.

Now, let's analyse the STI to see how it will fare next week.

Weak bullish rebound spotted

In picture 1, STI closed inside the 1st support region (I have changed the colour to white so it is clearer) as a green doji to end the week of 22 June. 

However, the green doji had a taller upper shadow than its lower shadow. This shows that the bulls dominated the trading session initially, but had eventually lost its strength to the bears. Furthermore, the green doji made an unsuccessful attempt to cover the bearish gap between 24 and 25 June as shown in picture 2.  

Picture 2: STI daily chart showing the gap down, via TradingView.

(Note: Some technical traders look at the shadows to confirm a successful gap close but I look at the candlestick's body as it is more accurate.)

A possible look at the 2nd support region

With that, I am still currently bearish on the STI and will be looking at the 2nd support region (shown in picture 1) next week. Although the downtrend isn't strong right now, I am expecting the bears to accelerate its downward movement soon. 

Straits Times Index (Week of 22 June 2020)

The coronavirus pandemic had created problems around many countries globally and Singapore was not an exception. The Straits Times Index (STI) fell below its major 3,000 level once again on the first trading day of March, and had been staying below till today.

Since late March, we have seen a recovery after a massive sell down in the Singapore stock market. The STI ended at 2,634.83 points on 19 June 2020. How will it fare for the week of 22 June?

Picture 1: STI daily chart via TradingView

Bearishness spotted

If you look at the chart, STI had made a high of 2,839.39 points on 9 June 2020 (Labelled "High") before throwing back to the previous low of 2,606.15 points. 

Unfortunately, it was reciprocated by a lower high (Labelled "Lower high") last week which shows that the bullish strength was far from being able to push the STI back to contest against its previous high. Between the bears and the bulls, the bears had surely won for the week of 15 June. 

1st key support is key

With that, I am expecting STI to fall further towards the 1st support region next week (it has yet to touch the highlighted region). Should STI pierced below the 1st region, there may be further bearishness towards the 2nd support region. 

Coronavirus... again? 

The Circuit Breaker enforced on 6 April 2020 was a trigger for a huge decline in Singapore's economy. Although phase 2 had started yesterday, it needed to happen in my opinion as many non-essential businesses are starting to face going concern issues after being out for more than two months.

As if things aren't bad enough, there are currently fears of a possible second wave of coronavirus. Should that really happen, what can happen to STI?