Still going sideways

Above is a daily chart of the STI. The STI is still going sideways. The focus is back to the US and EU. The recovery is US is gaining traction, with better housing stats and unemployment numbers. EU remains stuck in a recession. Earnings coming in are mixed, and thus for now, the markets are gyrating quite wildly. But major trend is still up, momentum seems to be turning up. Key levels are 3251 support and 3311 resistance for the STI.

Above is a daily chart of the STI. We are continuing to chop along. But I wish to draw your attention to my observations. Strong support is seen at 3251. This level has been tested twice and has held. A close below that level may signal a sell off to about 3200. For a confirmed continuation of the uptrend, the STI needs a close above 3320. But again, i say any pull back is a good opportunity to buy.

STI - sideways and looking tired

Here we have the daily chart of the STI. February has been a choppy month so far. Support at the 21 period moving average is still holding and the major trend is still up. But my main concern is the falling MACD and the inability of the STI to hold on to any gains. Resistance is at 3311 and support is at 3273. If 3273 is broken, next support is at 3250. Since longer term trend is up, i would suggest buying blue chips on corrections.

STI - momentum is on a downtrend

above is a daily chart of the STI. The STI has had a strong run up since Nov 2012, peaking at 3320 on 4 Feb 2013. However, after that, the STI has not been able to test that level again. The runup now looks tired, and we can see that the MACD peaked sometime in early Jan 2013 and made a lower high when the STI made a new high. This is bearish divergence and my guess is that the STI will come under selling pressure every time it attempts to rally. The 21-day moving average provided some support during the last correction and it looks like the STI will test that support around 3250-3260 if the STI consolidates further. Major trend is still up, but it looks like the STI needs to shed some points before buyers come in again.

STI - key resistance reached

Above is a weekly chart of the STI stretching all the way back to 2007. We had a major market crash in july 2007, which bottomed out in Oct 2008 and Mar 2009. We have been in an uptrend since then, which peaked in Oct 2010, then a correction until late September 2011. Since then, we have been chopping around and from Jul 2012 the upward momentum started to get stronger. And since we have been focusing on the downside, with all the talk about the weak global economy, we have failed to see that we have hit the previous high in Oct 2010. At this juncture, i see that the upward momentum is very strong. In fact, much stronger than the time in 2010 when the STI hit a high of 3314. So i think that this rally still has much going for it, and i would advise going long on any pull back. Next resistance levels are at 3600 and 3900.

a look at STI and selected counters

Above is a weekly chart of the STI. I am showing a weekly chart to give us a better feel of the major trends. The STI had quite a remarkable runup since mid November 2012 and is has been trading sideways for about 3 weeks now. Support is strong at 3200 with resistance at 3238. The major trend is up, and you can see that since Oct 2011, we have been making higher highs and higher lows. Any weakness in the market should be a good opportunity to go long.

Here is a daily chart of Noble Group. Consolidating after a huge runup in December 2012. Looks poised for another leg up. Support is 2.15. Resistance is 1.25, then 1.265 (the start of the huge gap down).

Genting is also consolidating after a runup in December, but the upside potential appears to be rather huge. Support is at 1.420 and resistance is at 1.635. There is also a bullish divergence between the MACD and the price between the july bottom and the Oct bottom, which is playing itself out now.

STI - great start to 2013

Above is a weekly chart of the STI. The STI has powered up strongly since late November 2012 and it does look like a minor correction is taking place. So far the support at 3172 has yet to be tested. Today, the STI went to a low of 3185 before rebounding strongly to close above 3200. The major trend is still up, but i think this is the start of a minor correction. I expect the STI to drop to 3150 before retesting the year's high of 3242. Any pull backs would be good buying opportunity, especially property, oil and gas, and commodities stocks as the outlook for the China economy going forward is positive.