• Singapore’s GDP contract 41.2% in Q2 after the lingering effect of the Circuit Breaker from late April to early June.
• The Singapore stock market resume selling after price fails to sustain the rally beyond the key resistance level.
• Major large cap stocks have seen market reverse their gains after a good stellar growth 2 weeks ago.
• Despite poor economic outlook, the stock will likely form a ranging corrective pattern towards end of Q3.

On our 6^th July report, we are optimistic that the Straits Time Index will test the high of 2,900 but the dream was dashed when the bearish engulfing candle appears at the resistance zone at 2,692-2,700. The subsequent sell-down see prices retest the resistance turned support again and this action indicate that the support zone is getting weaker, with a high failure rate of breaking downwards.

Another point to note is that STI has broke out of the ascending channel and should price continue to make lower lows after breaking the resistance turned support zone, the next rebound will likely be at 2,500 region.

2,900 remain the key resistance level to be tested in the long term.

AEM Holdings make a bullish comeback on last Monday but the rally was short lived as price begin to reject strongly at the resistance zone with a dark cloud cover formation. As such, the stock is attempting to push prices down to complete the double three corrective wave formation. Key potential rebound is at $2.75.

Fraser Centrepoint Trust had a strong upside upon breaking out of the pennant on 6^th July but price reverse and extended the pennant. The stock is currently well supported by the 50-day moving average but prices will likely head lower to test the support zone 1 at $2.28-$2.21.

Should the support zone 1 become invalidated, the next potential rebound will be at zone 2 ($1.93-$2.00).

Wilmar has played out according to our expectations based on our report on 7^th July. With the rising wedge and Stochastic Oscillator showing overbought crosses, the stock will be testing the critical support level at $4.25 once the bear breaks the lower bound of the rising wedge.

Should the critical support level be invalidated, the stock will enter into a period of short-term range before touching base at the support zone at $3.76-$3.80. 

We had a positive outlook on City Developments after prices forms a morning star with the third bull candle seen returning back into the lower bound of the ascending channel. However, the failure to raise higher indicate that the stock is heading lower to test the support zone at $7.50-$7.78.

Should this happen, the ascending channel will be transformed into an expanded wedge formation and $10.00 remain our key resistance target in the long run.