STRAITS TIMES INDEX – Part 4
Continue to advocate selling on any rebounds. While our forecasts for the Straits Times Index to decline for the week were met as it dropped by 2.6%, the magnitude of the downtrend was greater than what we had anticipated as the STI broke below our previous support level at 2,743 to hit a low of 2,706. Nevertheless, we believe that its technical outlook remains negative as the present Wave 4 is still poised to pull the index to lower ground. Given this bearish setting, we therefore opine that any technical rebounds should be seized upon as justifications to short-sell while longer-term investors are recommended to stay out for now until the STI has formed a firmer base.
The STI is still expected to head down. Immediate support is situated at the 2,695 mark as this is where a technical gap resides – should this level be broken below, support is next found at the 2,643 – 2,658 range. We would not be altering our bearish stance until the 2,823 – 2,850 resistance area has been broken above.
Look at to my previous posts on STRAITS TIMES INDEX – Part 1, STRAITS TIMES INDEX – Part 2 and STRAITS TIMES INDEX – Part 3.
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