Singapore: STI Index (.STI) has surged 9.3 per cent this year among the best performers in South-east Asia

Singapore: STI Index (.STI) has surged 9.3 per cent this year among the best performers in South-east Asia

Investors are sanguine about Singapore’s stock market even as the nation faces the risk of a technical recession, as a positive outlook for dividends and earnings overshadows threats from the US-China trade spat.

Singapore’s trade-reliant economy unexpectedly contracted by 3.4 per cent in the June quarter from the previous three months, reflecting sluggish global trade and electronics cycles. Following the data release, the International Monetary Fund on Monday (July 15) cut Singapore’s 2019 growth forecast to 2 per cent from 2.3 per cent.

The benchmark Straits Times Index, on the other hand, has surged 9.3 per cent this year. The gauge is among the best performers in South-east Asia and is expected to rise further. The reason behind such optimism is more than half of the 30-member gauge generate 50 per cent or more of their revenues outside the city-state, hence are less influenced by the domestic economy, data compiled by Bloomberg show.

And while earnings estimates fell at the start of the year, they have risen from their lows in February. Looking ahead, corporate profits are expected to grow by 4 per cent for 2019 compared to a 21 per cent decline in the previous year, based on data compiled by Bloomberg.

“Focus going forward remains on the outcome of US-China trade negotiations,” said Shayne Heffernan, CEO and Founder of Heffx. Singapore’s equity gauge may rise to 3,450, implying 2.6 per cent gain from Thursday’s close, as the world’s biggest economies work toward a deal, he said.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 3,286.56.

The projected upper bound is: 3,433.99.

The projected lower bound is: 3,326.26.

The projected closing price is: 3,380.13.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 32 white candles and 17 black candles for a net of 15 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 6 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 87.5013. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 66.97. 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 9 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 127.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 10 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 8 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed up 16.910 at 3,377.960. Volume was 7% below average (neutral) and Bollinger Bands were 48% narrower than normal.

Open High Low Close Volume___
3,368.3903,379.5003,365.6003,377.960 196,509,200

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

Moving Averages: 10-period     50-period     200-period
Close: 3,352.38 3,258.49 3,194.72
Volatility: 8 11 15
Volume: 189,722,832 208,253,472 212,487,184

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
STRAITS TIMES is currently 5.7% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 23 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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