Federal Reserve said on Thursday 18/Feb that they will raise the discount rate to 0.75 percent from 0.5 percent the interest rate it charges banks for emergency loans
This news drove S & P 500 to the lowest of 1101 before the news on the CPI was announced. The Labor Department informs that the Consumer Price Index rose by a smaller-than-expected 0.2 percent in January. In fact the CPI actually dropped for the first time in 27 years when volatile food and energy prices are stripped out. The "core" index fell 0.1 percent.
CPI reports came as a relief for investors since Fed will have to keep rates low for an extended period and causes S & P 500 to soar back to green & finally close flat.
Now back to STI, we are facing the “Great Wall of Resistance” (2825 to 2850) which I do not feel we can break them any time from now. However I also view 2700 as a very strong resistance turned support even though it has been broken once.
Important resistance of STI: 2825
Immediate Support of STI: 2700
My sentiment: STI will range bound between 2825 to 2700 for time being unless bad new occurs
MY TACTIC: I believe STI @ 2700 is strong support. Therefore I retain my previous view of buying once STI near to 2700. (Watch once STI near 2800, prepare to sell).
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