After our last email titled "Will STI Bottom at 2640?", STI indeed makes its bottom the next day, gradually rising to 2700. Today it ends at 2691. This is what Asian Stock Guru Mr Hu Li Yang mentions: STI at 2640 is the Box Bottom, technically showing a Strong Support!
We still continue our stand that:
Since STI climbs above 2640, this support has held, STI might enjoy a run up to 2910, the Box Top. Of course, 2800 is still a resistance. It is the 50% mark between 2910 and 2640. Be careful at 2800.
We believe that STI and Dow should continue its climb in January. To know whether STI will be good, we need to pay attention to US market.
Our reasons for being positive are:
1) This week marks the start of the earnings season for US stocks. Because of the great holiday season, (remember the Black Friday after thanksgiving marks the best retail sales ever in US history?) I believe that there are quite a number of companies in US going to beat earnings expectations this quarter.
2) Earnings season in US and Singapore will divert some attention to stocks' earnings and less on Europe crisis.
3) Last week shows a better than expected ISM (institute of supply management report) , Non Farm payroll report, and Unemployment rate report.
As I have mentioned before, to know the direction of the market, please pay attention to the first week of every month as ISM shows how is the enterprise doing, while non farm and unemployment rate shows how the public situation is.
Having said that, We reluctantly have to admit that 12700-12900 seems to be a big hurdle for Dow Jones still, just like STI 2900-3000 is still a big barrier. We predict that market might not be that good in February or March. But let us take one month at a time.
Hope you enjoy the market this month and have a Happy Chinese New Year!!
Daniel LohStock Trainer
Asia Stock Guru Mr Hu Li Yang partner
(Pls note that this email is solely for educational purpose only. There is no recommendation whatsoever to buy any stock. Any stocks or position taken should be studied carefully before taking any positions.)