Straits Times Index (Week of 27 July 2020)

During the week of 20 July 2020, Straits Times Index (STI) closed at 2,579.51 points. How will it fare for the week of 27 July 2020? Do take note that it is another four-day trading week as it will be Hari Raya Haji next Friday. 

Picture 1: Daily chart of STI, via TradingView.

The bulls exposed its weakness

In my previous STI analysis article for the week of 20 July, I was expecting a possible price breakdown towards its 2nd support region. However, the bulls supported the price drop on 20 July (last Monday) and staged another bullish attempt towards its 1st resistance region on 21 July (last Tuesday). 

Picture 2: Daily chart of STI depicting its bullish weakness, via TradingView.

Nevertheless, the bullish attempt on 21 July did not touch its 1st resistance region and the day ended with a doji. This was unlike its previous attempt where its bullish attempt on 15 July managed to touch its 1st resistance region. Evidently, this is a sign of bullish weakness.

The bears have woken up

On Friday, the STI made a decisive breakdown below its 1st support region. It formed a low of 2,572.93 points - merely 0.7 points away from its previous low. Evidently, this is not going to be an uptrend and the bears have won during the week of 20 July. 

It is highly unlikely for price to make a U-turn this time like what happened during its previous lower low at 2,572.23 points*. The bears have been very consistent in their strength over the past three weeks. 

Picture 3: Daily chart of STI showing a symmetrical triangle pattern, via TradingView.

Also, as mentioned in my previous STI analysis article (20 July), there is a possible major movement after STI consolidated in the symmetrical triangle since June. The movement is still currently playing out since the breakdown of its lower trend line on 17 July.

Bears charging ahead

With that, I will be re-iterating my outlook on the STI as my previous article. I am expecting STI to continue its bearish breakdown possibly towards its 2nd support region. 

This is in spite of a possible pullback to retest its broken 1st support region first - now a resistance region.  

*Jian Wu would like to clarify that the lower low of the chart was a typo error in his previous STI analysis articles. It is actually 2,572.23 instead of 2,572.33, and has been corrected.

Straits Times Index (Week of 20 July 2020)

During the week of 13 July 2020, the Straits Times Index (STI) closed at 2,618.48 points. How will it fare for the week of 20 July?

Picture 1: Daily chart of STI, via TradingView

Tug-of-war between the bulls and bears

In both of my previous STI analysis articles (6 July and 13 July), I re-iterated my viewpoint that the bears could make an attempt to pull the price down from its 1st resistance region back to its 1st support region.

The week of 13 July did seen three occasions when the STI managed to touch its 1st support region - 14, 16 and 17 July (Tuesday, Thursday and Friday). Presence of bulls can still be seen as STI made a pullback to backtest its 1st resistance level, before the bears regained its strength to end the week. Evidently, the bears had won for the week of 13 July.

1st support region remains the key

From the chart, both Thursday and Friday were two red candlesticks and were closing lower and lower. In addition, we have yet to see a green candlestick to determine that price is stalling in its area of demand (1st support region).

Theoretically, as long as price remains well above its 1st support region, we can safely say that an uptrend has been formed. However, there could be difficulties for the uptrend to sustain.  

Picture 2: STI daily chart showing a symmetrical triangle pattern, via TradingView

An incoming major movement!

When all the labels are removed, drawing in both upper and lower trend lines, we would see a symmetrical triangle pattern (as shown in picture 2). From a broader viewpoint, STI is consolidating inside a triangle since June. A consolidation within a tighter and tighter boundary would point to an imminent strong movement on either side.

Bears are dominating? 

From the same picture 2, we can see there is a break down below its lower trend line. With that, I will be expecting a possible major break down in STI which potentially, may touch its 2nd support region next week. 

Despite a possible uptrend, I am not very optimistic on the ability of the 1st support region to withstand the current selling pressure given the number of red candlesticks over the last two weeks. 

Coronavirus situation worldwide

Around the world, the US continues to see a large number of coronavirus cases towards 4 million cases, as India exceeded 1 million cases and Brazil exceeded 2 million cases. As what the World Health Organisation mentioned, it took 100 days to hit 1 millions cases globally. Now, it only takes 100 hours to reach 1 million cases. Apparently, the global coronavirus situation is accelerating on a rampage which could go even faster with more and more people infected. 

Singapore officially in a technical recession

Last week, it was announced that Singapore's Gross Domestic Product (GDP) fell 12.6% in Q2 compared to a year ago. The economy nosedived 41.2% in Q2 from previous quarter. This is much worse than the 3.3% contraction in the previous three months.

With two consecutive quarters of contraction, Singapore has officially entered into a technical recession. 

Straits Times Index (Week of 13 July 2020)

The Straits Times Index (STI) ended a four-day trading week with a closing price of 2,652.65 points on Thursday. With the coronavirus situation in US and the Singapore GE2020, how will it fare for the week of 13 July 2020?

Picture 1: Daily chart of STI, via TradingView

In my previous STI analysis article for the week of 6 July 2020, I was expecting the bears to make an attempt to pull the STI down to its 1st support after the bulls have touched the 1st resistance region.

Bulls continued its lead, until..

On Monday, the bulls continued its way in an attempt to pierce through the 1st resistance region. However, it was met with a heavy selldown on Tuesday despite opening higher and creating a new higher high at 2,707.67 points. This created a throwback to its 1st resistance region as a backtest of a possible new support.

Are the bears awaken? 

The throwback seemed to depict a tug-of-war between the bulls and the bears, until the STI experienced a second selldown on Thursday. This time, STI broke down below its 1st resistance region. Despite being in a consolidation (price is now made up of a lower low and a higher high), the breakdown shows a sign of bearishness

What can we expect next week? 

With that, I will continue to leave my expectation unchanged. It shall be the same as my previous STI analysis article for 6 July. The bears could dominate next week's trading session and bring the STI down towards its 1st support region.

The 1st support region shall continue to be an important area to look out for any price action.

Coronavirus situation in US and Singapore GE2020

The coronavirus cases in the US is still worsening as it exceeded 3 million cases. Meanwhile, Trump's decision to have US out of the World Health Organisation.

There are currently speculations of a possible 2nd Circuit Breaker in Singapore after the election. Should Singapore enters into another Circuit Breaker, things could get even disastrous as we can surely expect an accelerated surge in going concern issues around companies and businesses.

As of writing this STI analysis article, the GE2020 results has yet to be released and its possible that roosters will be able to wake up at 5am to view the ongoing process. Because the counting of votes has been delayed to 10pm later.

Straits times Index (Week of 6 July 2020)

During the week of 29 June, the Straits Times Index (STI) ended at 2,652.94 points. How will it fare for the week of 6 July?

Picture 1: STI daily chart via TradingView


Bears were caught off guard

In my previous STI analysis article for the week of 29 June, I was looking at the bears to continue its bearish momentum and accelerate to bring STI down to its 2nd support region. Last Monday, on 29 June, bears did made an attempt and formed a lower low at 2,572.33 points.

It seemed like the bearish momentum has indeed accelerated with the breakdown of its 1st support region, but the bulls made a surprising counter-attack which caused STI to make a U-turn over the next four days. The bulls, had apparently won during the week of 29 June.

Downtrend still remains

Despite the bull's victory, there is still no confirmation that the trend has changed as STI is still in a downtrend. The bears did formed a lower low on Monday, plus the fact that STI is still below its previous high of 2,688.99 points.

What can we expect next week?

As STI touched its 1st resistance region, I will be looking at possible attempts by the bears to pull the price down back to its 1st support region early next week. The 1st support region will therefore, still be a very important region to look out for any price action from there.

Coronavirus situation in US and Singapore GE2020

The coronavirus situation in the US is getting worse, as its 2nd wave caused a spike of nearly 55,000 cases in a single day. The economy is being dealt with further blows and will get more and more unsustainable should it continues to worsen. The STI will inevitably be affected by this situation in the US.

Also, the Singapore GE2020 will also be a major event to the STI. The GE polling day will be held on Friday (Friday is a declared public holiday) and next week shall be a four-day trading week, as the market ends its trading week after Thursday. The GE2020 results will be announced on Friday night, which might create an uproar in STI the week after.