Mild rebound expected for Singapore Market

The benchmark Singapore stock market index, The Straits Times Index (STI) broke the 2,100 support level yesterday, closing at a lowest low since late 2004. A technical rebound is expected as the market may strive to support and test the 2,100 points level. The 2,100 points would be the immediate resistance level. Breaking above the resistance level would mean that the market has still some support.

Then, we will have to wait for further developments on the chart to determine whether the support is real and has the market bottomed out. The concerted effort from central banks in China, Europe and US to slash interest rates to help ease the financial crisis yesterday did not stop the US market from falling lower amid fear of global recession. The Dow Jones Industrial Average fell 189 points or 2% to close at 9,258.10.

The next support level, should the STI fail to go back above 2,100 points level is at 1,800 points level. It is based on a very long term congestion level on the chart. The STI closed yesterday at 2,033.61 points, falling 6.6% from the previous day's close.


Monthly STI Chart as at 8 October 2008 using NextVIEW Advisor

Commentary and Analysis by Benny Lee