Unfortunately, the one-day sharp fall took place on a Friday, taking the STI to below its breakout level of 3,200, which is likely to negate, or at the very least place the upside objective of 3,345 in cold storage for some time. End-of-week levels are important because these are prices investors are comfortable spending the weekend with. Ending the week at a low is negative. For support, we may need to look to the 200-day moving average, currently at 3,132, which may hold if we’re lucky.
Global markets are somewhat unnerved by the new Covid variant and mutation in Southern Africa, causing sectors that had expected a recovery to retreat. Perversely, market turmoil, if it continues, coupled with oil price decline could stay the hand of the US Federal Reserve in raising interest rates.
Nonetheless, the new mutant caused the Straits Times Index to fall by 55 points on Nov 26, to end the week of Nov 23-26 at 3,166, off the Nov 26 intra-day low but still down 66 points week-on-week. The decline takes the STI within a hair’s breadth of the 50-day moving average, currently at 3,165.
