Singapore: STI Index (.STI) corporate earnings and economic growth may be bottoming out

Singapore: STI Index (.STI) corporate earnings and economic growth may be bottoming out

Singapore’s corporate earnings and economic growth may be bottoming out as cyclical indicators such as electronics exports show a slower pace of declines, according to Citigroup Inc. analyst Patrick Yau.

Citi’s earnings revision count indicator for Singapore stocks has declined to -50%, bringing it close to the level where it may have reached a trough, Yau wrote in a report on Monday.

The city-state’s economic growth is likely to accelerate to 1.7% next year from a projected pace of 0.6% in 2019, he added. A bottoming in growth expectations and a switch in the trade war narrative would “likely lead us to meaningfully change our stock picks and risk appetite,” Singapore-based Yau wrote.

The benchmark Straits Times Index has gained 5.5% so far this year, versus a 4.1% rise in the MSCI Asean Index.

The Singapore gauge has been boosted by real estate investment trusts, developers and technology stocks while consumer discretionary and offshore marine shares have been the weakest, Yau wrote. “While headwinds remain, there is a silver lining, with cyclical indicators bottoming,” he added.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 3,200.56.

The projected upper bound is: 3,296.33.

The projected lower bound is: 3,184.74.

The projected closing price is: 3,240.53.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 black candles.

A bearish harami occurred (where the current small black body is contained within an unusually large white body). During an uptrend (which appears to be the case with STRAITS TIMES) this pattern implies an end to the rally as the bulls appear to have exhausted themselves.

During a downtrend the bearish harami pattern is bullish as the bulls appear to be gaining strength as the bears weaken.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 50.2792. This is not an overbought or oversold reading. The last signal was a sell 6 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 56.08. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 7 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -49. This is not a topping or bottoming area. The last signal was a sell 7 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 3 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed down -19.790 at 3,238.870. Volume was 15% above average (neutral) and Bollinger Bands were 19% narrower than normal.

Open     High      Low     Close     Volume___
3,239.5503,248.7403,224.3603,238.870 254,882,896
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 3,252.86 3,173.52 3,228.22
Volatility: 12 11 12
Volume: 273,871,680 216,028,272 216,235,184

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

STRAITS TIMES is currently 0.3% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect volume flowing into and out of .STI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .STI and have had this outlook for the last 16 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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