As the STI is likely to rebound significantly in the event of test of 1600-1610 strong support, SGX which has been holding up well above $5 since Jan 28, should be rebounding around current levels.
In fact it could be a rare chance to pick up the stock whose 7-day RSI is below the 30 buy signal line, which only took place at the time of October and November respective lows of $4.15 and $4.31.
In addition SGX has also dipped briefly below the last Bollinger band today which had also taken place for 3 days each in Oct/Nov.
The cautious trader may want to wait for another couple of days for it to stay below the lower band. As yesterday marked the first day of sharp fall after range trading between $5.02 and $5.28 for the last 3 weeks, the trading chance may be gone if traders wait for the stock to fall below today’s $4.77 low.
On the other hand, with break of strong 1640-1670 STI support and the Dow just a whisker away from last year’s intra-day low of 7449, SGX may be vulnerable to selling pressure.
But last year’s 1600 closing low is unlikely to give way at the first test and the market should rebound back to 1660-80 in the next few days and SGX too should be back to above $5. Resistance at $5.22
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