(Updated 13/06/99)

N.B. Above Chart is abstracted from Metastock Program

Last week, we said that "Unless STI breaks 1850, we believe the triangle formation is real, and that we are now very close to the completion before an upsurge towards 2050-2150 level. This could happen probably in the coming week, if not the following week." The triangle formation was perfect and STI did performance as per our expectation and make a break up early last week. We are glad that most of our customers did follow our advise to buy before the break up and are now sitting with good profit. Last week's surge in STI was remarkable, the index was up a total of 139 points without a single down day through the week and was closed near the week's high. Could this be the start of a "Mega Bull Run"? or is it a "Buying Climax" that usually appear at the end of a bull market? This is certainly a very tough question to answer. It seems to me that the market does have big volume to continue supporting the uptrend, but then our concern is, this upmove was mainly driven by retailers and traders, unlike when STI was between 1500-1800, the upmove was driven by the incoming foreign funds. Nevertheless it is too early to draw a conclusion. What we can say is, if STI continues to move up towards 2100 (which we believe it will happen next week), it will then enter into a very critical zone (between 2100-2300). This is a zone whereby you will see a strong fighting between Bulls and Bears, as such, a volatile movement in STI is expected.
A break below 1950 will signal the end of the current bull run and that our alternate counts (A) or (B) will probably in play. However, if STI manages to break through 2300 by end July-early August instead, then we are actually in for a super bull run (impulsive wave 3) which will bring us to a new high above 2500 by year end. Which could be the most likely chance to happen? We think we need to let the market tell us the story instead of guessing in advance. However, as an investor it is certainly wise to be prudent when STI reaches 2100-2300 level. As such, we would advise you to reduce half of your holding during this range and observe carefully the development in the market. We will keep our eyes open and inform you as soon as we spot the right trend in the market.
As for individual sectors, Electronic and Manufacture sectors remain the strongest while Properties sector may do the catching up in the coming week.

Technically, STI has just completed its wave 4 and is now entering into wave 5. Expect STI to reach between 2100-2300 and consolidate in that range. A break out after the consolidation will help us in determine which scenario in our "Long Term Perspective" site is the most likely to happen in the coming months.

Events To Watch For The Coming Weeks/Month

1. The movement of US stock market and T-bond.
2. The development in Indonesia election.
3. Hang Seng Index movement.
4. Nikkei and JGB movement.
5. The stability of Regional and Singapore currencies (especially Indonesia Ruppiah)
6. Regional stock markets movement.
7. Singapore 3 months Inter-bank rate.