Technically, after breaking down from the ascending triangle formation on 15th Jan 09, STI has been moving in a range between 1,680 to 1,800. STI long term trend is still a sideway but short term after last week rally bias towards the upside. Upside might be capped at 1,800 as indicated by DI+ cutting down. The downside also fairly limited to the support at 1,680 as the ADX signal is flattish below the 20 level indicating no strength in the direction. MACD, RSI and Stochastic signals were showing sign of a possible short-term upside than downside. RSI rebound from oversold position and heading towards the 50% level. Stochastic signal cuts up strongly also heading towards the 50% level. The immediate resistance will be 1,800 level and a break at the 1,930 level might turn the long term sideway trend to an up and possible reverse the long term bearish trend. Immediate support is at the 1,680 level and a breakdown at this level could possible see STI falling to re-test the 1,500 to 1,550 level.
For the coming week, STI could be looking at how SSE reopens from CNY break, development of how the Obama's stimulus bill going to the US Senate level for approval, Singapore local banks earnings and economic data for direction.
For short-term investors/traders, market short-term might be in ranging mode with slightly bias towards the upside. Might be difficult to trade and get decent profit gain when STI is merely moving between 1,680 - 1,800 range. Have to select the counter wisely in order to get something out of it. Banking, Offshore/Marine, property and telco blue chips should be those which have a reasonable range to do trading.
For long term investors, with corporate earnings going on, it is good time to read through the balance sheets and hunt for the quality stocks and buy into it when price becomes at attractive value. Spreading out the purchase would be good as it could minimize the downside risk.
