Market Outlook (27/02/10) STI seesaw may continue!!

This has been a boring week for trader as STI has been seesawing between the high of 2782 and low of 2732 with less than 50 points difference for the entire week.

Although some news such as Greece's credit spurred the most recent pullback—triggers selling, but other investors quickly step in and take advantage of bargains pushing the stocks up again. One of the reasons that spur these actions is that the Federal Reserve seems intent on keeping interest rates near zero and what will trigger a correction is interest rate increasing. Therefore as long as investor continue to get cheap money, it will be very difficult to hammer this market down. Anyway do look out for more fed exit strategies as times goes and I will post out whenever possible in my blog.

Lastly I would like to point out that STI is currently “matching” HSI index movement. From the start of 18/Feb, STI & HSI seems to be going in the “opposite” direction of US market and HSI is currently undergoing a correction. (See charts above). However I would not worry too much till STI break 2700 support or HSI break 19500 support which may trigger more selling down pressure.

Important resistance of STI: 2825 (Retained previous view)

Immediate Support of STI: 2700 (Retained previous view)

My sentiment: STI will range bound between 2825 to 2700 but do watch out for Fed/China tightening policies.

MY TACTIC: I believe STI @ 2700 is strong support. Therefore I retain my previous view of buying once STI near to 2700. (Watch out once STI near 2800, prepare to sell)