Singapore: STI Index (.STI) dips on Fed’s dovish stance

Singapore: STI Index (.STI) dips on Fed’s dovish stance

Lacking catalysts, the local equities market had a cautious start to the week, and like its regional peers, saw muted market action.

The Straits Times Index (STI) finished at 3,311.53, down 9.87 points, or 0.3 per cent.

It was mixed across the region with markets in Australia, China, Hong Kong and Japan notching up modest gains. South Korea was flat and Malaysia closed lower.

“We were calling for a mixed start today regardless of the Middle East brouhaha as the market is weighted down by the uncertainty of what door to walk through,” said Vanguard Markets’ managing partner Stephen Innes.

The “doors”are the dovish US Federal Reserve, trade war uncertainty, Middle East escalation in tensions and the wait-and-see approach until the G-20 meeting between the United States and China.

Trading volume in Singapore clocked in at 1.38 billion securities, 16 per cent over the daily average in the first five months of this year. Total turnover came to $1.01 billion, just under the January-to-May daily average.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 3,373.39.

The projected lower bound is: 3,236.11.

The projected closing price is: 3,304.75.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 32 white candles and 17 black candles for a net of 15 white candles.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with STRAITS TIMES). It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

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 90.8407. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 21 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 66.78. 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 1 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 99. This is not a topping or bottoming area. The last signal was a sell 0 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 buy 13 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed down -6.270 at 3,305.260. Volume was 27% below average (neutral) and Bollinger Bands were 61% wider than normal.

Open High Low Close Volume___
3,317.0003,321.0903,301.3903,305.260 154,468,352

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 3,263.86 3,256.33 3,180.39
Volatility: 11 13 15
Volume: 215,130,736 205,620,352 212,182,256

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 3.9% 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 5 periods.

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