Chart Source : poemsview 22nd May 2020
Its close to 4pm now and the Straits Times Index is down over 50 points due to China tightening its grip on HK.
Hong Kong index is down over 1000 points or 5%, something which we haven’t seen in awhile. Due to the regional unrest, our Straits Times Index or STI also is affected . We’re down about 2% at the time of writing.
So what’s our game plan? If you noticed we’ve been rather bearish on the markets and continue to remain so until we see more convincing signs of rebound. With every rebound in the STI it seems to be making a Lower High despite US side having massive gains. This to us shows some weakness. STI is currently on its horizontal support of around 2500.
What could happen from here? Some possible scenarios:
- STI could have a rebound to cover the gap and test the downtrend again. Failure to break that might see more downside. If STI manages to break that downtrend line then our stand might change.
- STI could break the horizontal support level and might take us to around 2387 levels.
- STI could possibly hover around here and form a sideways consolidation before another move comes.
So stay alert! We’re eyeing more downside as you can see STI is below the moving averages but are flexible to react as market remains volatile and remembering the saying, Don’t Fight The Feds!
Want a quick discussion on the market direction?
Feel free to drop us a line!