STI - healthy correction

Good evening, the STI has been correcting since it broke out of 3000 points six days ago. I had expected it to hold above that level, but it was not to be. A slew of disappointing corporate results coupled with rising oil prices are threatening to put a dampener on global recovery.

But still, my view is that the correction is healthy, as the STI has been rising continuously since mid December 2011. Support for the STI is around 2,900 with resistance now back to 3,000.

correction: STI

After closing above 3,000 points yesterday, profit taking set in today. This looks like a good opportunity to pick up stocks. Support for the STI is around 2900 and resistance is around 3200. Momentum for the STI is decreasing, while both the medium and longer term trend is still up. So generally, traders and investors should be long in the market at this time, but should practise good risk management measures such as the setting of stops at the appropriate levels to manage losses.

breakout

STI has finally broken the 3000 points mark! On hindsight, the STI has been climbing steadily since the start of 2012, but after so many false breaks in 2011, I guess most investors and traders and wary of getting caught on the wrong side of the trade. Support for the STI is around 2900, resistance is around 3200. This was the level which the STI was unable to break in 2011.

STI, Genting SP

Above is an end-of-day daily chart of the STI. The STI started quite strongly in the morning, but profit taking set in as the index was about to hit the psychologically significant level of 3000 points. Support is at 2900.



Genting SP has had a strong run up over the past few days, and managed to close above its 200day moving average yesterday. Today, despite some profit taking, it managed to close above the 200day moving average and above yesterday's high and at a higher volume than yesterday. This shows very strong buying presence for the stock. Resistance is around 1.80, support is at 1.60.

STI, Golden Agri and Olam

Here is look at the daily chart of the STI. The STI has broken out of resistance of 2900 quite convincingly. It is now firmly on an uptrend as both the 50 and 200 day moving averages have turned up and the price is above these 2 indicators. Next resistance level is 3000. Support is at 2900.




Above is an end of the day, daily chart of Golden Agri. After going sideways for almost 1 month, it has finally broken out of strong resistance at 0.745. The next strong resistance is at 0.83, which is its previous high in late December 2010. I would say support is now 0.745.





Olam has been performing very well this year. It broke the previous high of 2.62 a few days ago, did a minor correction back down to 2.50, and has gone back up to close at 2.71 today. Uptrend is strong for this stock, with both 50 and 200 day moving averages turning up. The target for the next resistance is a little difficult to determine, but appears to be around a fibbonacci level of 2.88. Support is about 2.50.

end of day look at STI

Above is an end of day daily chart of the STI. The STI has been consolidating over the past 5 days and unable to close above the major resistance of 2911. But it has not closed below the 200d EMA either, so that is an indication that the 2850 offers good support. Next upside target is 3000 points, with 2850 being the first support, followed by 2800.