Market Outlook for 24/03/2011

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STI continued to strength its upside movement yesterday and it had closed 2 pts above the 3010 – 3020 gap resistance. Under close scrutiny, it actually closed exactly at the 20ma level. STI had bearly rebounded back to the pre Japan earthquake level. This is indeed a good sign and STI might comply with the bullish divergence. Or could it be a level where STi could for a lower high ?              
              
The candle for STI was a bullish one as STI closed close to the high of the day. This signifies that the market could still have strength to propell forward. The indicators are also poised towards the bullish side with no signs of weakening. With this strong resistance level, I will not be too surprise that STI would break this 3010 – 3020 level and starts to trades towards the next resistance level. After 3010 – 3020 level, there is a 200ma resistance and a gap resistance between 3060 – 3070.  If STI is to be resisted by this resistance level of 3060 – 3070, it can still form a lower high. But it would means that the price will be trading above 20ma and there would be a chance that STI will turn into uptrend. Hencefore, STI have to form a bearish reversal signal today in order to have a good chance to turn downtrend. However, the odds for today could be on the bullish side.              
              
The banks were again struggled to find reasons to bullish.Uob and DBS were still resisted by the 20ma. Ocbc was the only banking counter that is trading differently as it formed a long white candle. However, it closed exactly at 200ma. The offshores continued to strengthen yesterday. What is interesting is that they gapped down in the morning and buyers start to flow into the counters that propell the price higher and closed higher than previous day. The offshores still show strength.              
              
The properties were moveming against my expectation yesterdays  as they broke 20ma level without much hestiation. Citydev had a strong surge yesterday and ended above 20ma and exactly at 50ma. Kepland was also pretty similar as it breaks 20ma but ended at 200ma as resistance. Hencefore, there is no bearish signs and short side will not be viable anymore. Lastly, the commodities were pretty bullish yesterday. Especially Golden agri, Wilmar and Noble grp, they manage to break 20ma. The only exception is Indoagri which closed exactly at 20ma.              
              
In conclusion, the market turned out to be very bullish and there could be a strong chance to break this 3010 – 3020 level. Totally opposite from my expectation yesterday. The reason is because the rally yesterday was pretty broadbased and could be sustainable as the volume seems to be strengthening. If STI would to break 3010 – 3020, we shall watch out for the next resistance level of 3060 – 3070 level for a bearish reversal signal. But if STi does not break 3010 – 3020 today, it could mean that STI could be forming a bearish reversal and a lower high can still be in the cards. Hencefore, the strategy now again is to stay cautious and not to chase the surge in prices as the upside is more and more limited.