Singapore: STI Index (.STI): Investors focusing on Singapore flash Q4, full-year GDP data

Singapore: STI Index (.STI): Investors focusing on Singapore flash Q4, full-year GDP data

As 2019 comes to a close, market activity is likely to remain tepid with traders still making their return from their holiday break.

That said, liquidity in the region’s markets will likely pick up towards the end of the week, with the new year ushered in on Wednesday. The market will watch out for key macroeconomic figures that are due at the start of the month.

While there has been a lack of fresh leads, market watchers have said the confirmation of a United States-China “phase one” trade deal and clarity on Brexit should continue to support equities to close out the year positively.

US stocks ended mixed last Friday as investors weighed a rally that has added more than US$5 trillion (S$6.8 trillion) to equities this year. The Dow Jones Industrial Average edged up 23.87 points or 0.08 per cent to a fresh high of 28,645.26, the S&P 500 gained 0.11 point to 3,240.02, while the Nasdaq Composite dropped 15.77 points or 0.17 per cent to 9,006.62.

In Singapore, the Straits Times Index was mostly flat before a late light bump to finish last Friday’s session at 3,226.53, up 3.54 points or 0.1 per cent. On the week, the blue-chip index gained 14.14 points or 0.4 per cent.

Here, data releases for the week will be led by preliminary fourth-quarter and full-year gross domestic product (GDP) estimates on Thursday.

With industrial production in Singapore recording its sharpest fall since December 2015, by way of a 9.3 per cent year-on-year decline last month, UOB senior economist Alvin Liew noted that this could put some “downside risk to our full-year GDP growth outlook of 0.5 per cent in 2019”.

Analysts said indicators of where Singapore’s full-year GDP might end at could be revealed during Prime Minister Lee Hsien Loong’s New Year message tomorrow.

Thursday sees the release of private home prices data for the fourth quarter of this year from the Urban Redevelopment Authority.

As part of the slew of early month Purchasing Managers’ Index (PMI) releases, Singapore’s official manufacturing PMI for this month is due on Friday.

“While November IP (industrial production) was disappointing, global recession risk has lowered of late, thanks to Asia’s recovering tech sector. I will be looking at Singapore’s PMI survey this week for signs of economic stabilisation,” a trader told The Business Times.

In China, official manufacturing and services PMIs will be out tomorrow. Meanwhile, the Caixin manufacturing PMI, which focuses more on small and medium-sized firms in China, is due on Thursday.

Elsewhere in the Asia-Pacific, IHS Markit manufacturing PMI surveys for many of the region’s economies, such as Malaysia, South Korea and Thailand, will also be released on the same day.

IHS Markit chief business economist Chris Williamson said Thursday’s manufacturing PMI readings will provide “updated insight into whether world economic growth momentum has continued to build heading into 2020”.

Among other economic data prints, South Korea will release November industrial production data today, which UOB’s Mr Liew expects will increase 0.4 per cent year on year from a 2.5 per cent year-on-year decline recorded in October.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 3,202.84.

The projected upper bound is: 3,271.60.

The projected lower bound is: 3,176.61.

The projected closing price is: 3,224.11.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 24 white candles and 24 black candles.

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 78.4227. This is not an overbought or oversold reading. The last signal was a sell 0 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 56.11. 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 36 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 93. 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 11 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed down -4.090 at 3,222.440. Volume was 57% below average (consolidating) and Bollinger Bands were 39% narrower than normal.

Open     High      Low     Close     Volume___
3,228.0403,232.2703,214.3203,222.440 102,453,840
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 3,215.95 3,211.77 3,224.32
Volatility: 3 9 12
Volume: 151,182,480 260,973,648 225,395,776

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 0.1% below 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 1 periods.

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