 (Updated: 07/05/2000)  N.B. Above Chart is abstracted from Metastock Program Last week was rather disappointed for the STI performance. With a short four days trading week, STI had been continued drifting down despite of some good showing in US market. The index had lost 46 points over the week and looked trendless. We had said that "As for STI, the fact that it had broken above key resistance at 2120, suggested to us that it may continue to move up. A break above 2200 will indicate to us that wave B is still unfolding and that our idea target of 2300-2360 is quite possible." However, STI only managed to climb up to 2187 last Monday before continued sliding down. As such, 2200 had not been challenged over the week. This left us wonder what to expect over the coming week. Can STI move up to our idea target of 2300-2360? As for Sesdaq, last week was a better performer as compare to its big brother STI. We had said that "As for Sesdaq, a break above 120 will bring the index into a critical resistance at 125-127, which should hold the current rebound before coming down again.". Indeed Sesdaq did move up to a high of 122.94 before closing at 120.49 last Friday. Since it had broken the 120 mark we mentioned last week, does it mean that it will continue to move up? These are a few questions we would like to look at now. While Dow Jones and Nasdaq continued to consolidate side way over the past one week without giving a clue as to where the medium term direction is, it is very difficult for our market to make any head way now. Although last Friday's employment data did suggest a tight labor market in USA, it was a surprise to see a rally in both Dow Jones and Nasdaq after the released of figure. So, on one hand there is a fear of Fed hikes rate in the coming May 16 meeting, but on the other hand, the stock market seems to refuse giving up its bullishness. We believe this phenomena may continue over the coming week without any decisive break on either side. Our guess is that the market will continue to be lethargic until the Fed meeting. However, once the meeting is over, it will make an impulsive move one way or another. And that could determine the next two to three months movement in global stock markets. Expect STI to move within the range of 2234-2050 next week. Only a break above 2234, will signal a continue rally to 2300-2365. However, if it breaks 2050, it will probably go down to test the recent lower towards 1960. As for Sesdaq, a continue rally in the early part of the week towards 125-127 is quite possible, but will probably reverse its direction by middle to end next week, when many contra players unwind their holding of last week's position. Penny stocks shall continue to remain the main play next week, but not all participants can survive the roller coaster ride. Only those who are quick to act and discipline (most important Not too greedy!) will make an handsome profit in this volatile market. Can such penny stocks play lead to another bull market like what was happening in last year's May? I doubt so, Even if the momentum does persist, it will probably create a mini bull but can never match with last year's scale. Communication, transport and hotel industries may be in for the next play, so do pay some attention to them!
We have put 2583 as the top of wave 5 of wave (5), even thought theoretically we should wait until STI close below 1970. This premature labeling may lead us into a wrong picture for the long term, if STI eventually stay above 1970 and do not break below it. But nevertheless, the early we make our stand, the easier it is for our investment decision. At current stage, it looks as if that wave B may be still unfolding. A break above 2200 will confirm our view that STI is still in wave B and that the idea target for it will be at 2300-2360.
Events To Watch For The Coming Weeks/Month .
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