Singapore Straits Times Index Analysis - on its way to crucial support level

The decline of commodities prices did not boost the confidence of investors as most are still worried about slowing economy, especially in the credit market which seems to be still happening in the US. We have not seen it coming into Asia yet, but slowly and surely, Asians will have to go through it, including this small republic country.

Some time last week, I wrote about Singapore getting ready to rebound because of the declining commodities prices and the strong rebound in the US market but the did not managed to start.

The Singapore benchmark Straits Times Index (STI) continues to slide lower for the past three weeks and closed at 2,797.50 points on 15th August 2008. The STI has tested the 2,800 points support level and managed to close below it last Friday. This looks like the STI is on its way to the crucial support level at 2,740 points, which was evident on 17th of March and 22nd of January this year.

The STI trend is down and strong. If it continues to decline and break below the crucial 2,740 points support level, then expect to see STI being pushed another 200 points lower to the next support level at 2,550 points. Immediate support level is at 2,850 while the stronger resistance level is still at 3,000 points.


Weekly STI chart as at 15 August 2008 using NextVIEW Advisor

Commentary and Analysis by Benny Lee