(Updated: 26/12/99)

N.B. Above Chart is abstracted from Metastock Program

Last week, we were expecting STI to test a high between 2400-2450 in an early part of the week. STI did test a high at 2448, but it happened at the end of the week instead. Last Friday's big move was somehow influenced by Dow Jones 200+ point gained overnight. With half trading day and thin volume, the market was easily manipulated. To sum up, the performance on last week continued to center on blue chips. Started with a big bang on news related to join venture between SIA and Virgin Airline, the market continued to move up on rotational basis with SIA, DBS and SPH led the whole pack. It was indeed an exact copy of what had happened over the past weeks. Sad to say, while STI continued its record breaking, most of the joy went to fund managers and big investors. As for retail investors, the bell did not ring in Christmas, for most of the penny stocks continued to trade within a tight range with some of them even dropping further on price. It was only until Friday that Sesdaq did make some come back, but was rather unconvincing. With only one week before a turn of Millenium and only four trading days left, what will happen to our Singapore market? Is STI going to close at record high for the year?

We believe the last four trading days of the year will be somehow quite, while window dressing on some stocks are expected. STI may try to hit its resistance at 2470-2480 level, but will probably close around 2380. As for Sesdaq, it had broken a down trendline last Friday at 142.50, hence more upside is expected. However, it will probably meet resistance at 155-160 level and close somewhere around 153. Our Singapore market will continue to be led by Finance and Transport sectors, while Electronic and Manufacturing have begun their correction. The Properties and Construction remain the weakest of the whole lots in the Main Board. The following are resistance and support to watch for Dow Jones, Hang Seng and Nikkei next week:

Dow Jones Hang Seng Nikkei
Resistance 11500 17000 19000
Support 11250 15870 18650

Any break-out on these levels, will certainly affect our STI movement.
We had some discussion on Y2K last week, and we are finally reaching "the day" soon. Will there be a big disaster strike on the turn of Millenium? I will certainly not rule out the possibility. Whether it is by coincident or not, many major stock markets indices do show some possible of big correction in January. Could the turn of Millenium kill the bull markets and wake up the bear for year 2000? I am not sure, but the possibility is there. So, let's pray that no unexpected big events will happen next week and the week after, and that the world will cross over the Millenium with peace and harmony.

Technically, we are now in 5th wave. If we are right, the market has just completed the 5th of the 1st of the wave (5). In this case, we may see a short term top at 2450-2480 level. Alternatively, we may have just completed the 5th of wave (5). If this is so, we may be experiencing a big correction soon. We shall let the market tell us the story next week.

Support 2435, 2415, 2400, 2380, 2350, 2280, 2247, 2200, 2169
Resistance 2450, 2470-80, 2500

Events To Watch For The Coming Weeks/Month

  1. The year end effect.
  2. The effect of Y2K.
  3. The movement of US stock market and T-bond.
  4. The movement of Dollar vs Yen.
  5. The stability of Regional and Singapore currencies
  6. Regional stock markets movement.
  7. Singapore 3 months Inter-bank rate.

Wishing All Of You
Happy New Year !!