Is STI recent rally sustainable?

On 16/Mar, STI ended up 0.8%, or 22.10 points, at 2,896.43 with 1.14 billion shares changing hands, compared with 1.03 billion shares Monday. In the broader market, gainers outnumbered decliners 240 to 181.

For the past 2 days, the STI VOL has been very LOW as we approach the important resistance of 2900. In fact today STI rally might be caused by huge buy up of a “high STI weightage” counter Singtel and most investors are preferring to stay at sideline awaiting policy cues from the Federal Reserve with the U.S. central bank due to hold its monetary policy meeting later Tuesday. Many hoped that Fed can provide more details on how and when the central bank will exit its emergency measures.

Lastly today market is mainly supported by property stocks such as CapitaLand Ltd. rose 2.3% to S$4.00 and City Developments Ltd. gained 2.1% to S$10.88 after the release of strong local dwellings data Monday.

Immediate gap resistance of CapitaLand: $4.07 to $4.19

Immediate support of CapitaLand: $3.74 (RSI @ Oversold)

My sentiments: STI @ important resistance of 2900 and the VOL are low. Basically investors are waiting for more outcomes before buying more. Therefore I would encourage my readers to stay at sideline as well.