In last week, STI merely gain 3 points from the opening of 2936 and close higher at 2939. A white candle sticks with long lower shadow similar to “Hammer” affirms that the support at 2915 is gaining its ground.
Key US Economics Data reported:
On Tuesday US government reported that previously owned homes sales dropped a record of 27.2 percent to 3.83 million units from June which is the worst level since May 1995.
On Wednesday, another report on durable goods orders excluding transportation dropped 3.8 percent which is the biggest plunge since January 2009 after rising 0.2 percent in June
All these data are hinting at the current sluggish economic growth though “Double Dip” is unlikely. However investors will remain cautious ahead despite of Fed’s promise to prevent “Double Dip” at all cost on Friday’s speech.
The average loss for S&P 500 is 0.7 percent based on data from 1950. However four out of the last five Septembers ended positive except Sep 2008.
Important US data in next week includes:
1) Monday: Personal income and the Dallas Fed survey
2) Tuesday: Chicago PMI
3) Wednesday: Construction spending & ADP employment report
4) Thursday: Weekly jobless claims, productivity and costs; pending home sales and factory orders:
5) Friday: ISM non manufacturing data & August employment report
Important China data in next week includes:
6) Wednesday: Manufacturing PMI
7) Friday: Non manufacturing PMI
Technical Analysis on STI
STI index remains directionless at LOW volume as investors stay at sideline.
Important points to note
1) In weekly charts, a white candle sticks with long lower shadow demonstrates the strength of the technician support at 2915.
2) The weekly trading volume decreases since the direction ahead is unclear
3) MACD and RSI indicators are neutral as MACD lines are closely tie together.
4) STI is currently sustained by minor technical support at 2915
5) We would see STI 2900 as a very strong support as technical/20 weeks MA & 50/100 days MA is near that level.
Important resistance of STI: 2950 (Daily charts)
Immediate Support of STI: 2915 (Daily charts)
MY tactics: STI continue to rest at soft support of 2915 and relatively no reason for any strong up rise in stocks. Therefore we would suggest investing small portion if interested.
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