Market Outlook (24/04/10) Hold your cash and prepare to buy on dips!

In last week, STI lost 19 points from the opening of 3007 and close lower at 2988 to mark another bearish candlestick which is the “hanging man” in weekly chart to show signs of market reversal. The VOL in this week is LOW as well as many investors may not want to enter at this timing since the situation is unclear.  

The Fed's two-day meeting will be closed on Wednesday with a speech which is expected to be uneventful. Fed watchers do not foresee any change in the tone nor do they expect the Fed to drop its much discussed "extended period" language. 

Other important events that happen next week will be the first look at US first quarter GDP on Friday. That is the number economists have been revising for weeks and analysts estimating the growth to be around 3 percent.

In last week, Singapore has been slipping over the concerns over the China government restriction in the property sector while weaker commodity price dragged down material stocks over the Asia. The announced measures are not really harsh but the indication is strong as the China is determined to curb rising property price. All these reports created a SELL down pressure across the board especially on developers. Thus I would advise investors to keep out of developer stocks such as Capitaland, Ho Bee for next week pending for clearer directions.

Important resistance of STI: 3040

Immediate Support of STI: 2955

MY Sentiment: STI got no strength to rally but little reason to sell down as well. In short term, market favors pullback especially US market has been rally for 8 consecutive weeks since Feb without a decent pullback. Therefore hold your cash for now and prepare to buy on dips.