 (Updated 18/07/99)  N.B. Above Chart is abstracted from Metastock Program Last week, we said "Expect STI to trade in the range of 2250-2100 for the next two to three weeks before any possible of breaking a new high later." STI did trade according to our expectation and was confined within the trading range of 2250-2100. However, our expectation on Sesdeq was some how disappointing. We said "For Sesdeq the worst is probably over, for if we are still in a bull market, a pull back of 30% is considered more than enough." But the Sesdeq index continued to succumb to selling pressure and was traded to a low of 131on Friday. It was a surprise to us, but then again it had told us that the Sesdeq's great bull run was probably over by now and that any up-move would face strong selling pressure and may not be able to create any new high by end of the year. This week is a bit more complicated and uncertain. While STI did trade within a trading range last week, it did not offer us any clue as to whether it is going to consolidate in the form of abcde triangle or an abc zig-zag. As such we could only try to make a guess at this juncture by looking at regional indices, Dow Jones and some domestic economic data that could trigger the movement in STI. It seems to us that Taiwan index had hit a critical support last Friday after its futures index make limit down twice. In fact during last Saturday's half day trading session, we had seen some recovery on the Taiwan index. As such, so long as no unforeseen circumstances and further escalating tension between China and Taiwan, we would probably see some rebound in Taiwan and Hang Seng indices. As for Singapore domestic front, Tuesday's release of trade data may lend some support to the stock market too. As such, if STI manage to stay above 2100 for the first two days of the coming week, we would probably see a sideway triangle consolidation before a break out in one to two weeks time. However, if STI break below 2080, it will continue to move down towards 2030 and a possible of testing 1940 before a short term bottom is formed. Hence, the next two days are very important for the short term performance of Singapore stock market. As for Sesdeq index, last Friday's low of 131 had fallen into the range of 130-135 mark, that represent 50% retracement from the April broke out point to the new high of 206. At the same time, the index had also touch the medium term moving average. Hence, under normal circumstances a short term support or a technical rebound should be in the card. As for the individual sectors, the uptrend on blue chips, electronic and manufacturing sectors remain intact and may challenge a new high in the coming weeks, but properties and construction sectors' indices are now turning weak and are the major cause of concern. Technically, STI has completed its wave 5 of wave (3) and is now entering into wave (4). The wave (4) could be either a triangle or a zig-zag a-b-c, we would have to sit tight and watch the development. Only a break above 2230 will signal a resume of an up trend. A break out after the correction 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
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