Dear readers, yes, today is finally the first day for Singapore Safe re-opening post Covid-19 Circuit Breaker? Will the Straits Times Index (STI) rally next as Singapore enters into the first day of a three-phase re-opening of its economy?
The Straits Times Index (STI) yesterday already went up by 1.6% to close at 2,550.86. But to look at how the performance of the Straits Times Index (STI) going forward, we turn to technical analysis and look at the technical chart of the STI.
As of its close yesterday, the STI 5-days moving average and the 50-days moving average coincide and meet at 2,520, while the 20-days moving average is above the two moving-averages. The support of the STI seems firm at 2,520 and provided there are no near-term further catalysts on the larger macro front to bring prices south, the STI may stage a rebound with the re-opening of Singapore’s economy.
On the other side of the camp, Singapore has confirmed a recession for this year. World bodies like the World Bank have also commented that the world economy has entered or will be entering into a global recession. And many said the upcoming recession or financial meltdown could be more challenging than the Great Depression.
Even if the STI is to rebound from this level, I am of the view that upside gains are limited. My personal view is that the world has not really won the war against Covid-19. The vaccine for Covid-19 is not out yet. And even taking Covid-19 aside, there are already other macro economic factors at play that could cause world financial markets to head down from the current levels.
I maintain my view of a near-term support of STI at 2,000 first when the stocks markets come correcting.
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