Dear readers, right now, the Singapore stocks markets, as measured by the Straits Times Index (STI) seems to be in a similar zone in Feb and March 2020 before the STI corrected. To recap, back in the Mar 2020 stock market correction, the STI closed at a low of 2,233,48 on 23 Mar 2020, which is approximately 30% lower than the current level of the STI.
In Feb 2020, the STI was consolidating around the longer-term 200-days moving average before it went decisively down this average while the RSI of the STI was in the oversold region. This is what is happening to the STI right now: an oversold STI with the STI heading below the 200-days moving average.
Back in Sep 2021, the STI has already started consolidating around the 200-days moving average and back then the STI was in a neutral region and the STI has since rebounded. But this time round, it seems that a likely correction is quite evident: the oversold level was at a significant level and investors have to be alert if the shorter-term averages like 5-days and 20-days moving average start turning below the 200-days moving average. That may mean a return of the STI to a level of Mar 2020: a 30% crash of the STI next!
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